Auckland City Council moves to maintain current stake in Auckland International Airport Ltd

Auckland International Airport Limited (AIAL) is raising approximately $126m through an accelerated renounceable entitlement offer to shareholders, using a staged approach, to partly repay the debt used to fund the acquisition of a 24.55 percent shareholding in North Queensland Airports Limited. As an eligible institutional investor, the council was offered additional shares at a discounted rate.

Had Auckland City Council decided not to purchase additional shares, its shareholding in AIAL would potentially have been diluted.

The council has resolved that it will act in accordance with its stated policy and maintain its current 1271% shareholding in AIAL by purchasing the additional shares that it is eligible for.

Council’s policy and its publicly stated intent require it to ensure this minimum level of shareholding is maintained. The council will need to finance the purchase through debt of approximately $16 million.

Finance and Strategy Committee chair Douglas Armstrong says the council has moved quickly to protect its pledge to ratepayers to maintain a minimum level of shareholding in the airport, thereby preserving its strategic position.

“From 1 November, Auckland City and Manukau City Council’s shareholding will be transferred to the new Auckland Council and it will be their role to determine future policy in respect to the Auckland Airport shareholding,” said Councillor Armstrong.

The council will seek Auckland Transition Agency approval for the purchase as required under the Local Government (Tamaki Makaurau Reorganisation) Act 2009.

ENDS

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