MEDIA RELEASE

20 December 2002

Council receives and invests airport share sale proceeds

Auckland City Council has received the $185.1 million net proceeds from the sale of half its shareholding in Auckland International Airport Limited.

The chairperson of the council’s Finance and Corporate Business Committee, Councillor Douglas Armstrong, says the $185.1 million has already been “ring-fenced” and set aside for the purpose of moving towards a zero net debt position. This amount is the sale proceeds of $190.8 million minus the costs of sale.

The net sales proceeds have been initially invested in short to medium term deposits and investments, as follows:

- $36.2 million has been invested in overnight bank deposits. These proceeds, plus the current sinking fund of $11.3 million, will be deposited with a bank, and used to retire Auckland City’s remaining local authority stock when it matures.
- $68.2 million has been invested in floating rate investments, which will be rolled over until August 2006, and used to offset the Auckland City bonds maturing in August 2006.
- The balance has been invested in overnight deposits, bank bills, treasury bills and high quality corporate commercial paper, with maturities ranging from 30 to 90 days.

After repayment of debt, the remaining $80.7 million, together with the capital repayment proceeds of $54 million and the $83 million proceeds from the sale of the council’s pensioner and residential housing, will be ring-fenced and set aside to fund planned long and short-term commitments, including the Indoor Arena and Britomart project.

“The council has said from the start that we were in this process to eliminate debt. We have been adamant the share sale funds would not be squandered. This investment policy clearly demonstrates that we are prudently managing the funds we have received,” says Councillor Armstrong.

ENDS

Ref: SL/PH

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