$212m airport windfall on way

By DANIEL RIORDAN aviation writer

Auckland International Airport shareholders, including the Auckland City Council, are set for a $212 million windfall come spring.

The airport company said the structure, timing and size of any capital repayment had yet to be decided, but the repayment would likely be of that order and take place in September or October.

At $212 million, the repayment would equal the company's issued capital, allowing it to be tax free.

The news, together with a solid third-quarter profit result and passenger flows, sent the share price 13c higher yesterday to close at $4.71, after earlier touching an all-time high of $4.75.

The council, which owns 25.7 per cent of the company (108.2 million shares), could be in line for $54.5 million.

It will decide next month what to do with its stake - worth $509 million at yesterday's closing price.

The council's finance and corporate business committee will meet on Thursday to consider an evaluation of its options from Credit Suisse First Boston, although the council agreed in principle last December to offload the stake.

Council finance director David Rankin said the earliest any sale process could start was July, and it could easily be postponed if that enabled the council to receive its repayment.

In its half-year report, released in February, the airport company said it expected to achieve a second-half result similar to the $35.1 million profit recorded for the six months to December.

Yesterday, it said that target remained in its sights, with passenger flows post-September 11 continuing to gain momentum.

Profit for the three months to March 31 was $18.3 million. International passenger movements for the March quarter rose 5.4 per cent compared with the same period last year and domestic numbers were up 7.4 per cent.

Managing director John Goulter said the company did not normally report quarterly, but released these unaudited results to provide continuity with other updates it had given to the market since September 11.

The retendering process for retailers at the international terminal had finished, with the company securing an extra $15 million a year on new five-year contracts that start in October.

The Standard & Poor's ratings agency said Auckland International Airport's improved business position and reduced expenditure needs underpinned its ability to meet uncertainty in passenger traffic and maintain its creditworthiness despite its increased debt.