Board will further reduce voting rights
Web site: www.cppib.ca
CPP Investment Board will further reduce voting rights in response to new government regulation
AUCKLAND, NZ (10 March 2008): The Canada Pension Plan Investment Board (CPPIB) today announced that it will further restrict its ability to vote its shares of Auckland International Airport Limited (AIAL) if its partial takeover offer is successful.
CPPIB intends to voluntarily reduce its voting power for all shareholder resolutions, with the exception of resolutions that affect the rights attaching to CPPIB’s shares, to 24.9% of all AIAL voting shares on issue. CPPIB will also provide that the limitation to 24.9% can only be relaxed or revoked by CPPIB if it is permitted by a New Zealand overseas investment law or regulatory approval to vote more than 24.9% of the voting shares in AIAL on issue.
The voluntary restrictions that CPPIB will put in place in relation to its voting rights reinforce the fact that CPPIB will not have control over AIAL in any respect.
Overseas Investment approval is required for overseas investors wishing to acquire 25% or more of the shares in substantial companies or companies that have sensitive land.
CPPIB’s Vice President - Head of Infrastructure, Graeme Bevans, said CPPIB has carefully considered the amendment to the Overseas Investment Regulations announced by the Government on 3 March 2008.
“From the beginning, we have always said that we have not wanted control of Auckland Airport and we have been careful to structure our investment accordingly. However, now that the Overseas Investment regulations have changed, we have taken further initiatives to make absolutely clear we will not control the airport, even under the revised standards."
“Although CPPIB will have a 40% economic stake in Auckland Airport if our offer is successful, the additional restrictions we have decided to put in place around limiting our voting rights to 24.9% of all AIAL voting shares on issue will ensure that control of the airport even more visibly remains in the hands of the company’s broad shareholder base, the vast majority of whom are New Zealanders."
“We have always made it clear that our desire to be a long-term minority non-controlling investor in AIAL and our stake will assist New Zealanders in maintaining control of Auckland Airport."
“By bringing our global contacts and aeronautical expertise to the table, and by working alongside the airport’s management team and the directors on the Auckland Airport Board, we will also help to strengthen this key strategic asset for the benefit of all AIAL shareholders and New Zealand as a whole."
To effect these changes to the voting limitation, CPPIB will alter the Voting Limitation Deed it entered into in December 2007. The only shareholder resolutions the 24.9% limitation will not apply to are resolutions which affect the rights attaching to CPPIB’s shares in Auckland Airport. That is a very confined range of resolutions and would only include resolutions which, for example: give shares held by CPPIB lesser voting rights than the limited rights it has agreed to, or give shares held by CPPIB lesser rights to dividends than the rights that they currently have.
About CPP Investment Board:
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. As at December 31, 2007, the CPP Fund was C$119.4 billion (NZ$148.7 billion) of which C$2.5 billion (NZ$3.1 billion) represents infrastructure investments. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income.
Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments.
UBS has acted as financial advisor and Bell Gully has acted as legal advisor to CPPIB.