Monday, 30 November 2015

Plans to sell City Care announced

Christchurch City Council will sell 100 per cent of City Care Limited through a competitive sale process starting in the New Year.

Christchurch Mayor Lianne Dalziel says the decision is in line with the Council's 10-year financial strategy, agreed to through the Long Term Plan (LTP) 2015-25 process.

"Christchurch City is facing a funding shortfall as a result of earthquake response and recovery, and significant infrastructure repair and replacement costs. We must address our financial challenges so that we can plan for the future and take back responsibility for the city's long term recovery and regeneration.

"As part of the LTP process earlier this year, the Council agreed to include a provision to raise funds through the Christchurch City Holdings Limited (CCHL) capital release programme if required.

"We received a resounding message from residents and interest groups who took part in the consultation process: they wanted us to retain control of our core infrastructure assets, namely the port, airport and Orion," she says.

The Council has directed CCHL to start the process to sell City Care. It is expected an advisor will be appointed by Christmas to lead the process, which will begin in earnest in the New Year. The aim will be to complete the sale process by the end of the financial year in June 2016. No decision has been made to sell any other assets at this time.

The Council decision to sell City Care was informed by an independent report on capital release options. As the report indicates, there are a range of options for releasing capital that do not involve the sale of assets. Highlights from the Cameron Partners report are available here.

CCHL Chief Executive Bob Lineham says City Care is expected to generate strong interest from potential buyers.

"City Care is an attractive asset, with a presence nationally and expertise across a range of portfolios including parks maintenance, facilities management, civil construction, building construction, landscape development, water and wastewater and roading. Any sale needs to meet price expectations but we are anticipating strong interest in City Care. "

City Care has informed staff of the plans and is offering support to any employees who have questions or concerns about the process.

About City Care

City Care provides infrastructure services to over two million New Zealanders from 16 locations throughout the country. Established in 1999, City Care is a Council Controlled Trading Organisation (CCTO). The company is fully owned by Christchurch City Holdings Ltd, the commercial and investment arm of Christchurch City Council. City Care announced a net profit after tax of $10.23 million for the year ended 30 June 2015. Revenue for the year was $334 million.

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