America’s Cup Village Limited

September 1, 2000

AMERICA’S CUP VILLAGE LOSS GROSSLY OVERSTATED
Statement made by Peter Kiely, America’s Cup Village Limited

A report in the New Zealand Herald of August 30, and repeated in the Evening Post and the Dominion in following days, which claims the America’s Cup Village lost $56 million is false and totally inaccurate.

The Herald’s original article incorrectly interpreted information given to them.

The loss on providing for public participation and land based events at the Village was $9.5 million.

The cost of developing infrastructure, in effect helping create the wharves and facilities that make up the Village, is $14 million. This $14 million is an investment in a water based stadium.

Combined they come to $23.5 million.

This information was released publicly on August 24, 2000.

The estimated realisable value of our land holdings at the Cup Village is $38.9 million. This value has been determined by independent, expert valuers. That valuation has been accepted by our auditors, Audit New Zealand, and on that basis has been adopted by the board of America’s Cup Village.

The method used to value the property is the same as that used in past years.

The Herald in its article instead used a value of $29 million, based on a question contained in a letter by an Infrastructure Auckland executive, who in the course of preparing financial information asked whether the method used to establish the value was the most appropriate one. This question was reviewed at the time, and based on independent, professional valuation, we continued with the method we have used in previous years.

The Herald then simply deducted $29 million from the original investment of $85.7 million, reaching a “cost” of “$56 million”.

In addition to using the incorrect value, this approach ignored $10 million received from the sale of a part of the property known as the log farm, external funding of $11 million received from Ports of Auckland and Government, and residual net working capital of $2.3 million.

For others to repeat or use the Herald’s $56 million figure is to repeat the original error.

No amount of repeating inaccurate information will change the net loss from $9.5 million and the investment from $14 million.

For further information please contact
Peter Kiely, chairman, ACVL, Tel 09- 366 5111 025 715 111

Issued on behalf of America’s Cup Village by
Dennis Lynch, Network Communications, Tel 0-9-379 3154 025 963 733

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