Councils get okay to buy airport shares

Auckland City Council and Manukau City Council have both been given authority to spend millions of dollars to take part in a capital raising by Auckland International Airport Ltd (AIA) so they can maintain their holdings in the airport.

The approval was confirmed at a board meeting today of the Auckland Transition Agency, which was formed to oversee the merging of local authorities in Auckland into the Auckland super city later this year.

Both councils sought approval after deciding to take part in a $126.4 million capital raising announced by the airport yesterday. The airport is raising money to reduce debt after buying a 24.55 per cent stake in two Australian airports, Cairns and Mackay in Queensland.

Both councils decided to take up their entitlements to buy new shares in the airport because they did not want to dilute their holdings.

Auckland City Council had a 12.71 per cent stake and Manukau had a 10.01 per cent stake. Auckland was to finance the purchase of the shares through debt of about $16m. Manukau said it would cost $12.66m to maintain its stake.

The council shareholdings will be combined when the new Auckland Council is created.

- NZPA