Auckland City Council will retain it's shares in Auckland International Airport.
Auckland City Council will retain it's shares in Auckland International Airport.
KEY POINTS:
Canada Pension Plan says Auckland City's decision to rule out selling its airport shares won't derail CPP's plans to seek a minority stake of up to 49 per cent.
The decision was "consistent with the type of proposal outlined in our announcement", Mark Wiseman, CPP senior vice-president ofprivate investments, said yesterday.
On Monday night Auckland City Council voted unanimously to hold on to its Auckland International Airport shares but, in a narrow vote, it approved provisions which would allow it to restructure its shareholding for better financial returns at a future date.
The council set out a number of bottom-line requirements for any restructuring, all of which CPP appeared to be comfortable with yesterday.
The requirements include: no reduction in the council's stake of 12.75 per cent, no single investor controlling more than 50 per cent of voting rights, the ability to influence the governance and strategic direction of the airport, agreement that the council's ownership or influence will not be diluted at a later date and the continuing listing of the airport.
On Monday morning the CPP Investment Board confirmed that it was planning to make an offer for the airport but would give no details about the price or the final structure of a proposal.
Wiseman confirmed he had been talking to key airport stakeholders including both Auckland and Manukau city councils.
The councils hold 23.25 per cent of the airport between them and so hold the key to any CPP proposal.
Like an earlier offer by Dubai Aerospace, CPP's offer is likely to require the approval of 75 per cent of shareholders.
Dubai Aerospace is seeking to pull out of a deal it had reached with the Auckland Airport board of directors. The fate of the deal will be decided by tomorrow night but most commentators believe it is effectively dead.
The wild card for CPP may be infrastructure investor Infratil which has set itself up with a pivotal 6.2 per cent stake. Infratil has said it believes a minority 49 per cent stake would effectively be a controlling stake.
