Proposed Napier Port float a step closer with HBRC vote

The Hawke's Bay Regional Council is set to vote on the mechanism wil be used for the proposed partial float of shares in Napier Port. Photo/Hawke's Bay Today.

The Hawke's Bay Regional Council will vote tomorrow on creating a council-controlled organisation to take Napier Port to market through an initial public offer and sharemarket float.

The council will also decide on the protections aimed at preserving its majority ownership and the appointment of directors to the port's board after approving in principle the sale of 33 to 45 per cent of the port's shares last December.

A final vote on whether to proceed with the partial sale will be made in four to six weeks, regional council chair Rex Graham said.

He said Wednesday's meeting would be about deciding on some of the protections for the community when the partial privatisation takes place.

"We want to this to be a fair opportunity for everyone, including the locals," Graham told the Herald.

Graham said the partial sale would serve both the port's and the council's capital requirements.

"The regional council has a huge responsibility around the environment and some of the challenges and global warming, which is coming our way," Graham said.

"We want a strong balance sheet in order to meet these challenges, and the port has a strong balance sheet to ensure that it can grow appropriately as well," he said.

The regional council's patch includes the Heretaunga Plains - a flood plain - and New Zealand's most productive region for horticulture production.

It also plans to reforest erosion-prone hill country and the re-establish wetlands in the province.

"It's about introducing some new capital to help us in all these endeavours," he said.

Napier Port's net profit lifted 5.4 per cent to $17.6 million in the year ended September 30 on a 5.8 per cent increase in revenue to $91.7m, according to its annual report.

The port handled a record 5.1m tonnes of cargo, with log exports lifting 35 per cent to a record 2.2m tonnes.

A total of 266,006 containers or twenty-foot equivalent units passed through the port's container terminal, and the port's onsite packing operation handled a record 51,126 TEU containers.

Apple exports exceeded 23,000 TEU containers for the first time, while fertiliser, cement and oil imports were steady.

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

In its last financial year, the Port of Tauranga lifted its net profit by 13 per cent to $94.3 million. Annual container throughput increased 8.9 per cent to almost 1.2m TEUs.

The Port of Tauranga, which listed on the NZX in 1992, is 54 per cent owned by the Bay of Plenty Regional Council.