Auckland City progresses airport share sale

“The process to explore the sale of Auckland City’s 26 per cent stake in Auckland International Airport Limited (AIAL) is proceeding according to plan and we have commenced discussions with prospective buyers,” says the chairperson of the council’s working group, Councillor Douglas Armstrong.

The council is selling the airport shares to repay debt and provide the funds necessary to improve the city’s infrastructure.

A dual-track sales process is expected to maximise the sale proceeds. The sales strategy will target all possible buyers - including trade buyers, institutional and possibly retail investors - to achieve the best price.

“Councillors have been asked if they are willing to sign a prospectus so that a share offer can be considered for the people of Auckland city,” says Councillor Armstrong.

To undertake a sale to the public, securities law requires the council to issue a prospectus signed by every councillor. All 20 councillors have been asked to sign and return a letter to the council’s acting chief executive David Rankin confirming their willingness to sign a prospectus.

“If one councillor decides not to sign then we cannot issue a prospectus – and the average Kiwi will miss out.”

Councillor Armstrong says the council’s sales process means considering all options. “We want to know as soon as possible whether the option of a retail offer is in or out. A prospectus would allow the council to consider offering shares to Auckland city ratepayers, and possibly allowing them to pay for the shares over a period of time.”

A sale to trade and institutional investors does not require a prospectus, so the dual-track strategy will proceed whether or not councillors sign the prospectus.

“If we are unable to issue a prospectus that does not hinder our sales strategy, however it would be disappointing if we were not able to consider giving ratepayers the option of buying the shares,” Councillor Armstrong says.

Councillors have until Wednesday, 2 October 2002 to formally advise their willingness to sign a prospectus.

Councillor Armstrong reiterates that the council’s shares in AIAL will only be sold if a very good price is obtained.

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