23 August 2012

Council extends Eden Park guarantee

Auckland Council today agreed to extend its guarantee on Eden Park Trust’s $40 million ASB Bank loan by two years.

Council’s Governing Body extended the guarantee until 1 December 2015. The guarantee on the ASB debt facility was negotiated by the former Auckland City Council, on behalf of the region’s local bodies, in July 2010. It was then transferred to Auckland Council at amalgamation.

The upgrade of Eden Park stadium for the Rugby World Cup 2011 was funded through a $10 million grant from the former Auckland Regional Council on behalf of the people of Auckland, as well as loans from ASB and Auckland Council. Eden Park Trust pays the interest on the ASB loan and also on council’s $65 million loan.

The ASB Bank has signalled its willingness to extend its loan to the Trust by a further two years, which requires the council’s agreement to extend its current guarantee. At the same time, the council will extend the principal repayment holiday on its own loan to the Trust to match the new maturity date on the ASB loan.

The Trust had assets of $320 million, and debt of $55 million, as of October 2011.

“We feel it’s timely to look at changes to both the ASB facility and council’s loan,” said Andrew McKenzie, Auckland Council’s chief finance officer. “The loan extension provides the Eden Park Trust with a stable financial environment while it works with partners on a longer term business model.”

ENDS

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