On 23 December 2009, Hawke’s Bay Regional Council completed its purchase of the 8.3 percent share holding in the Port of Napier Ltd from Horizons (Manawatu-Whanganui) Regional Council.
The rationale for the purchase by Hawke’s Bay Regional Council is that 100 per cent ownership allows for efficient restructuring of the Council’s total investment portfolio, including the potential creation of a holding company structure. The aim of this body would be to focus the investment portfolio on regional development investments of benefit to Hawke’s Bay.
Further aspects in favour of the transaction included a better return on investment than is currently achieved by holding cash, and an immediate book value gain that will be realised on the Hawke’s Bay Regional Council’s balance sheet.
The purchase was made from funds in the Sale of Land account which has been built up from the sale of leasehold residential and commercial properties which the Regional Council inherited from the Harbour Board. The purchase price of $9.3 million includes a component of assessed dividend for the first quarter of Port of Napier Ltd’s financials, forgone by Horizons Regional Council due to the timing of the purchase.
The shares have subsequently been revalued on the Regional Council’s balance sheet at $10 million and forecast net profit after tax from the first quarter operations are well in line with expectations. |