HBRC approves protections before proposed Napier Port float

The Hawke's Bay Regional Council has created a vehicle for the proposed flaot of Napier Port. Photo/Hawke's Bay Today.

The Hawke's Bay Regional Council has voted to adopt additional protections for its majority ownership position in any future initial public offer (IPO) of shares in Napier Port.

The council also voted to establish a new council controlled organisation (CCO) to be called Napier Port Holdings Ltd which would be the entity taking a minority stake in Napier Port to market.

The decisions made today are subject to a final decision, due in four to six weeks, on whether to proceed with a minority listing of the port.

It is understood that a so called "non-deal roadshow" is already under way to introduce the company to potential investors.

Regional Council chair Rex Graham said the council was working with the port and its advisers in preparation for a potential minority IPO; including work on ensuring locals who wanted to buy shares in the Port would be prioritised.

He said with the council retaining a majority stake in Napier Port post any IPO, and with likely interest from the Hawke's Bay community and domestic institutional investors, it was likely domestic ownership of Napier Port would remain high.

The additional protections supported by the Regional Council today, if a minority listing of the Port goes ahead, include:

• Ensuring the council's majority ownership position in Napier Port could not be diluted, such as through any subsequent share issues or equity raising, below 51 per cent in the future

• The right to determine the composition of the Napier Port Holdings and Napier Port Boards through a majority vote

• Appointing two majority shareholder-appointed directors to the Napier Port Holdings and Napier Port Boards

• Reducing the threshold at which Napier Port Holdings and Napier Port would need to seek shareholder approval for significant transactions

• Inserting a restrictive covenant on the strategically important Port land at the main Westshore site, including limiting any potential future sale of the land without Regional Council consent and limiting the use of the Port site to Port purposes.

While final decisions on a minority IPO of Napier Port were still to be made, the council was making decisions that reflected local feedback during the consultation process around protecting local ownership and control of Napier Port without diluting any commercial value of Napier Port.

"Through confirming two majority shareholder-appointed directors and providing for additional protection of its majority ownership position, the Regional Council will gain a more direct level of involvement in the governance of Napier Port on behalf of the local community under a minority IPO," he said.

Graham told the Herald last week that the port shared similar drivers of those of its far larger northern neighbour, the NZX-listed Port of Tauranga.