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MCC Adopts Amendment to Long-Term Plan

Manukau City Council Adopts Amendment to Long-Term Plan

Airport Investment Management Strategy Approved

Manukau City Council has approved its amendment to its Long Term Council Community Plan, which sets out a strategy to manage the council’s 10.05 per cent holding in Auckland International Airport Limited.

The council has carried out public consultation on the amendment, with 552 submissions made, the majority of which were in favour of the strategy.

Mayor Len Brown says it is important to the community that the council retains its shareholding.

“As a major employer in the city, and a vital transport hub for the city, region and country, the airport’s continued development is the council’s objective,” he says.

The strategy provides the council with the basis to consider any offers made for the company. At this stage, the council has not received any formal offers.

“Clearly, the proposed CPPIB take-over offer meets some of the council’s criteria but not others The council will consider the detail of any CPPIB offer once it is received.

The full text of the strategy is attached.

The proposed objectives in the strategy are:

Strategic:

  • the council should maintain its present level of ownership

  • the company must be committed to, and able to deliver on, the development of the airport

  • the company not pursue strategies that risk dilution of the council’s shareholding

Financial:

  • generate improved financial results (increase future dividends and possibly free up capital) for the council

Commercial:

  • there should be no single controlling shareholder (a controlling shareholder would probably have more than 30 to 35% of the shares)

  • the council should be able to appoint a Board member, (appointed for his or her ability to contribute to the forward direction and governance of the airport company and in line with the council’s policy the director would not be a councillor or officer of the council)

Liquidity:

  • the company should be listed on the New Zealand Stock Exchange (NZX)

Overseas Ownership;

  • no single overseas owner with a controlling interest (there will of course be a number of smaller overseas shareholders).

Background

Manukau City Council owns a 10.05% (122,747,646 shares) shareholding in Auckland International Airport Limited. Manukau City Council became an original shareholder of AIAL in 1988 on corporatisation of the airport. At that time the airport was owned jointly with the Crown holding 50% of the shareholding and the Auckland local authorities each having individual shareholdings totalling 50%. Later the Crown increased its shareholding to 51.6% after acquiring the small shareholding of Papakura District Council.

In 1998 AIAL was listed on the New Zealand Stock Exchange. All local authorities, with the exception of Manukau, have either partially or fully sold their shares in the airport. Manukau was the only local authority to increase its shareholding.

ENDS

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