Dunedin City Council Proposes Transfer of Stadium to Dunedin Venues Limited

Dunedin (Wednesday 23 November 2011) - With the completion of the Forsyth Barr Stadium, the Dunedin City Council proposes transferring the assets into Dunedin Venues Ltd, a company wholly owned by the Dunedin City Council. The management of the assets will continue to be carried out by Dunedin Venues Management Ltd. DVML will lease the Stadium from DVL.

The transfer price has been set by an independent registered valuer at $225 million.

As indicated in previous Annual Plans, the Council also proposes transferring the net debt on the Stadium.

The difference between the transfer value ($225m) and the net debt (estimated to be $140m-$150m) is $75m-$85m and is proposed to be treated as paid-up share capital.

This will give Dunedin Venues Ltd a robust balance sheet. This capital structure does not commit Dunedin City Council or Dunedin Venues Ltd to any further debt or commitments to further debt.

As previously reported, Dunedin City Holdings Ltd will contribute $5.25 million p.a, to Dunedin Venues Ltd to contribute to servicing the debt it acquires from Dunedin City Council.

This completes the full set of transactions anticipated in previous Annual Plans and leaves the boards of Dunedin Venues Management Ltd, Dunedin Venues Ltd and Dunedin City Holdings Ltd, along with the Dunedin City Council, well equipped to meet their commitments in the future.

The Chairman of the Finance, Strategy and Development Committee, Cr Syd Brown, stated that "the transfer of the Stadium to DVL, under DVML's management and supported by the Council family of companies, means the way is clear for the Stadium to become a successful enterprise."

The proposed transfer will be discussed at the meeting of the Finance, Strategy and Development Committee on Monday 28 November.

ENDS

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