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Port Nelson Share Buy Back

Published: Tue 31 Oct 2006 09:32 AM
Port Nelson Share Buy Back
The directors of Port Nelson Limited today advised that as a result of a review of the capital structure of the company they have recommended proceeding with a share buy back that will deliver $25 million to the two shareholders, Nelson City Council and Tasman District Council.
The port has been reviewing its capital structure over the last two years, in line with the company Statement of Corporate Intent, and has also extensively reviewed the 10 year strategic capital development plan.
Chairman Nick Patterson said the focus of the review had been to achieve a capital structure more in line with the port sector in general, and to establish a level of shareholders¹ funds that was more appropriate to the nature and risks associated with the port¹s business.
³We are confident that the company will continue to have a strong balance sheet well able to support the development and maintenance of our port facilities,² he said. ³Port Nelson has been faced with greatly rising property values that have been largely unrealisable due to the long term nature of rental reviews. This has resulted in returns on growing shareholders¹ funds that are below targeted levels, and we believe the return of capital will provide better options for the shareholders.²
Mr Patterson noted the board was cognisant of the significant upcoming regional development demands being faced by the shareholding councils.
³We feel the timing of the share buy back will be welcomed by the shareholders and by the people of the region in general.²
On completion of the share buy back, the shares purchased will be cancelled, thus leaving the two shareholders with 100% control of the port company.
Mr Patterson said the share buy back would not affect the future dividend plans of the company or ability to fund capital works.
Ends

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