The airport said it would immediately seek short-term bank facilities to "provide funding certainty" and if the plan was approved by shareholders the company would replace short-term arrangements with long-term funding.
Final refinancing would target an average debt maturity greater than seven years.
Lister said the company's debt to enterprise value would rise to 28 per cent which he said was "sensible and manageable" and compared to Sydney airport's debt ratio of 46 per cent.
"There's nothing wrong with funding your business with debt - it's a lot cheaper than equity especially at the moment - debt is not a bad thing as long as it's used sensibly and as long as you're within your banking convenants," he said.
The company will seek shareholder approval in February for a scheme of arrangement to cancel one in 10 shares at $3.43 each.
The transaction requires approval of at least 75 per cent of voting shareholders and the company would then seek final High Court clearance in March, with the return of capital aimed for mid-April.
Auckland Airport chief financial officer Simon Robertson said the council owned 22 per cent of the company and were in line for just under $100 million.
"My expectation is that they would be delighted," he said.
The airport said 40 per cent of the payment will be a capital return for tax purposes and the balance treated as a dividend, fully imputed at 28 per cent tax rate.
"The company's strong performance over the past five years, including our successful property development and retail businesses and our investments in other airports, means we currently have a less efficient mix of debt and equity than we had in the past," said chairman Sir Henry van der Heyden.
"By returning capital to our shareholders we can improve our balance of equity and debt, returning to levels achieved in 2011," he said.
Robertson said that in 2009 debt as a proportion of the value of the company was 35 per cent but this had fallen to 20 per cent.
The airport said it is well placed to continue investing in the upgrade of its domestic terminal even with the payment.
It also has plans to expand its international terminal and surrounding area as part of a 30-year growth plan which in today's dollars would cost about $2.4 billion.
"We would be very clear on that. In no way would we expect that our capital return would affect our ability to fund our future growth aspirations including our progress to what has been labelled the airport of the future."
He said the airport didn't expect any impact on its A-credit rating with Standard & Poor's but would find out in the next few days.
Lister said the airport's earnings had taken off in the past two years with strong performance in its property and retail business adding to airfield and aeronautical revenue.
Asked whether the company had considered spreading the benefits with all airport users, Robertson said the Commerce Commission had given its charging regime a tick and the airport's own figures found its international charges were about average and its domestic fees were "low" compared to similar airports.
The Board of Airline Representatives said it did not have a view on the capital return.
"The financial position is a result of a mix of aeronautical income and commercial income. We only follow the aeronautical side and so cannot comment on the overall position," said executive director John Beckett.
Robertson said the airport had raised around $130 million to fund investments in airports in Queensland. During the past five years it had invested $575 million on expansion.
