Auckland Council confirms airport share sale
Friday, 1 September 2023
Auckland Council has confirmed it has sold a portion of its stake in Auckland International Airport Limited (AIAL).
The shares – a 7% stake in the airport company – were sold at an average price of $8.11 per share, earning $833 million.
A majority of councillors agreed in June to sell a portion of the council’s airport shareholding to reduce debt.
The price is 30 cents higher than the $7.81 when trading closed at the end of Thursday, but below the $8.75 the shares traded at on June 9, when the council confirmed its intention to sell.
The sale means the council won’t receive around $4 in dividends, payable in October.
The council’s acting chief executive Phil Wilson says the sale is a positive outcome for the council and for the residents and ratepayers of Tāmaki Makaurau.
“When faced with an even greater budget gap as a result of three successive years of financial challenges brought about by the pandemic, flood and cyclone recovery, and inflation and interest rate hikes, the governing body agreed to sell-down a portion of the council’s shareholding in AIAL,” Wilson said in a statement.
“It set council staff firm guidance to achieve the best possible outcome, including offering the mana whenua of Tāmaki Makaurau the opportunity to participate in the sale.
“We are advised that it is the only share sale of its size in New Zealand to be sold at a premium to the market traded price, and a testament to the process initiated by the council and its advisors.
“The result is a significant return that will offset our existing debt profile and lower future interest costs.”
Auckland Council retains an 11.08% shareholding in the airport company.
Group chief financial officer Peter Gudsell says the council followed a structured process to manage the sale, which balanced the council’s objectives of maximising the sale value with an appropriate timeframe.
“We also monitored market conditions, including the timing of company, Commerce Commission and macro-economic information releases,” Gudsell said.
“Executing the sale after the release of AIAL’s latest annual results on 24 August also allowed for a fully informed market prior to the council’s sale and ensured we were engaging with the broadest pool of potential buyers.”
Gudsell said the council has been told the shares were widely distributed to domestic and international wholesale investors and New Zealand retail investors via the broker network.