INDEPENDENT NEWS

Decision Looms on Auckland Airport Share Sale

Published: Mon 26 Jul 1999 07:34 PM
by Selwyn Manning -
Those waiting to invest in Auckland International Airport shares will have to wait a little longer, with Manukau City Council tipped a “dead-cert” to increase its shareholding rather than sell for cash.
The final decision of whether or not to sell $120 million worth of Auckland International Airport shares will be made tomorrow night at a Manukau City full council meeting.
This vote will surely be a decisive “No Sell”.
Scoop understands that Manukau City Council has a majority two thirds of its 30 seat council tipping to keep the Airport shares. Manukau mayor Sir Barry Curtis also is openly in favour of keeping the shares in Council ownership.
On the eve of this decisive meeting, a numbers count shows 19 councillors wishing to keep the shares with 11 voting to ditch them.
Those behind the freemarket approach to sell the shares would then push to use the money to wipe out the City’s ballooning debt problem. Under such a tack any remaining cash would then be invested and interest used to run the Council’s bureaucracy.
Already, Papakura District Council has sold its shares. It invested the cash and used money earned in interest to reduce rates and to push ahead with major infrastructure developments within that city’s boundaries. Waitakere City has also sold its stakeholding.
Auckland City, with a 25.8 percent shareholding, is teetering on the brink of whether to sell or not. As is North Shore with its 7.1 percent, and Franklin with its 1.2 percent stakeholding.
But Manukau is set to keep its shares. In an exclusive interview with Scoop, Councillor John Kerr says to sell them would be short sighted.
“It is vitally important,” Cl Kerr says, “to keep the Airport shares for future generations.
“It is more strategic to do so. The Airport is within Manukau City’s boundaries and it would be foolhardy to lose control of a stakeholding,” Cl Kerr says.
He advocates a progressive “invest in stock” move to buy an extra 1.4% shareholding in Auckland International Airport: “This would be a much more strategic move,” Cl Kerr says.
An extra 1.4 percent shareholding in Auckland International Airport on top of the City’s current 9.6 percent shareholding would provide the City the right of representatives on the Airport company’s board of directors.
“That way Manukau City will have a hand in managing Auckland International Airport,” Cl Kerr says.
Tomorrow night’s decision is highly important not only to Manukau City but also to the rest of New Zealand. An “international buyer” wishing to invest in the Airport is waiting for a bulk-share-sale to be offered. This investor would then move to secure control of the Company’s board and would oversee possible “major changes” to Auckland Airport operations with implications to New Zealand tourism. Two weeks ago the Council was evenly split on the “sell or retain” issue. But such information, circulating among City councillors, has multiplied the weight of national pride. Thus, tomorrow night’s vote will surely be a win for those wishing to keep the shares.
Council’s officers have also been instructed to report to tomorrow night’s meeting with alternative plans on how to cut the City’s debt which exceeds $100 million. Such plans will likely cut Council expenditure, and will include a probable sell off of City owned residential properties which total in the millions of dollars.
Earlier plans by City officers backed a hulking rates hike. But Cl Kerr says a majority of councillors feel uneasy with that. He says an acceptable increase in Manukau rates will be 6 to 7 percent on top of last year’s take: “This compares well with other councils within the greater Auckland region,” he says.
Selwyn Manning - Scoop Auckland
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