Share in Napier Port could be put up for sale as directors look at expansion

By Patrick O'Sullivan -
6 comments
A partial sale of Napier Port may be considered if expansion plans receive resource consent. Photo/Duncan Brown.
A partial sale of Napier Port may be considered if expansion plans receive resource consent. Photo/Duncan Brown.

A stake in Napier Port could be for sale as it looks to finance its biggest investment since it was established.

Chief executive Garth Cowie said a new wharf and associated infrastructure was needed to cope with increasing cargo volumes and bigger ships.

It could cost more than $100 million, which the port could fund through debt, but its directors were obliged to consider all options.

"It is not about whether we can afford it, it is about whether that is the best way of funding," he said.

"It will be considered whether such things as: it is the right balance for us, or whether we might not pay as much dividend, or whether it is additional user-pays-type things - all those things will be considered as part of the business case.

"That could be years away - we haven't even got resource consent yet.

"No decision has been made about any of those different options."

Napier Port is owned by the Hawke's Bay Regional Investment Company (HBRIC), which is owned by the Hawke's Bay Regional Authority.

Once port directors decide on funding options they will be included in a business case needing approval by both HBRIC and the regional authority.

Authority chairman Rex Graham said there was no doubt the port needed to expand and port directors were duty-bound to consider all options.

Hawke's Bay was experiencing an export boom, with forestry and pipfruit output expected to sharply increase, he said.

Talk of a stake in Napier Port being sold, such as Port of Tauranga's float on the stock exchange, was "just chatter" at this stage.

"You have to keep an open mind and look at all the options going forward," he said.

"It is the port directors' job to decide which way they want to go. I understand they will be looking at all the options and how they could do it."

"It is a decision they will make, but the port does need to grow to meet growth.

"The port directors are saying, where to from here? Do we expand the port and build a new wharf?"

Napier Port chairman Alasdair MacLeod said all options would be looked at.

"I'm not going to rule out anything yet, given I don't know the size of the challenge yet, but it [a partial sale] is not something that is being aggressively pursued," he said.

For the year to the end of September port profit was $11.5m from revenue of $72.7m.

The regional authority was paid a dividend of $7.9 million.

The port is entering its busy season, with the apple harvest under way.

Mr Cowie said he was confident port operations would run smoothly during harvest, despite cargo diverted from Wellington's earthquake-damaged CentrePort.

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