Prime Minister Announces Sale of Wellington Airport

Prime Minister, Jenny Shipley announced the Government had reached an agreement with New Zealand Airports Ltd for the sale of the Crown's 66% shareholding in Wellington International Airport.

"Under city council and government ownership over the last 30 years the airport has not been a positive asset for our capital city Wellington or the commuters passing through it. This is not a reflection on the airport company management but shows the unwillingness of former shareholders to invest public money in areas like runway or terminal development.

"The risks of running and developing the airport now passes to New Zealand Airports, the largest shareholder of which is the Wellington-based company Infratil, which specialises in infrastructure investments. This is good for travellers and people in the city. Infratil is listed on the New Zealand Stock Exchange and 80% New Zealand owned.

"The Crown has received a good price for this sale. The sale price will bring in $96.36 million dollars. This is the same price the Crown was offered for its share if it had sold with the council.

"The Crown will use the return on the sale to retire debt. The resulting debt servicing savings of $5 million per annum ongoing will become available for priority purposes such as health and education.

"There will be an additional one-off benefit of about $25 million to the operating surplus because the sale is above its book value.

"The understanding which has been reached with this New Zealand-led consortium provides assurances for continuing New Zealand control.

"Under the planned sale arrangements, the Crown will sell its 66% shareholding and the purchaser is legally bound to ensure that at least 17% of the total shareholding in the company remains in New Zealand hands.

"This condition will remain for as long as the Wellington City Council retains the whole of its 34% shareholding in the company.

"If the city council should decide to sell any of its shares, then the 17% requirement would no longer exist.

"We believe this deal will be good for taxpayers, the people of Wellington, and everyone who uses the airport."

"This was the preferred option of Ministers who took the decision at Wednesday night's Cabinet. It is also an option that meet New Zealand First's preferred position," concluded Jenny Shipley.