Napier Port reveals priority entitlements for pending IPO

UPDATE: Further details of July 15 float released.
Port of Napier, seen at night.

UPDATE:  Hawke's Bay residents and non-resident ratepayers who apply for shares in the planned Napier Port initial public offer will get a guaranteed minimum allocation of $2000 of shares while port employees will get a guaranteed minimum of $5000 worth of shares.

Under the proposed terms of the IPO, the residents and non-resident ratepayers as well as port employees and certain iwi entitites, will be given priority entitlements or preferential allocations to port shares.

The Hawke's Bay Regional Council gave its approval earlier this week to the float of a 45% stake in the port, while maintaining majority control.

The preferential treatment meets the council's requirement that any share sale be structured to ensure strong local ownership.

Along with the guaranteed minimum worth of shares, port employees will also be granted rights to take up an interest-free, limited-recourse loan from the port to help pay for any shares they buy.

Kiwi entities eligible to participate in the offer include Ngati Kahungunu Iwi Incorporated, the four taiwhenua of Ngati Kahungunu and each tangata whenua appointer as defined in the Hawke's Bay Regional Planning Committee Act. What preferential allocation they get will be deicded once demand for the IPO is known.

Port chairman Alasdair MacLeod said like the regional council, "we believe strong local participation in the port IPO is desirable".

The port is in the final stages of preparing the offer and is targeting a launch on July 15 with a listing on the NZX in August. Those with priority entitlements will be required to apply for them in the fortnight after the offer opens and a product disclosure statement providing full details is released.

EARLIER: The long-awaited float of a 45% stake in the Napier Port has been given the go-ahead by Hawke’s Bay Regional Council.

The initial public offer on the NZX will include a priority offer for Hawke’s Bay residents and non-resident ratepayers, iwi and port staff.

Napier Port is planning to formally launch the offer in mid-July, with listing on the NZX in August.

The port wouldn’t confirm the size of the offer at this stage through previously a $200 million figure has been indicated.

Last week's listing of medicinal cannabis company Cannasouth broke a drought of IPOs on the NZX, which hadn't had one since Oceania Healthcare listed in May 2017. The NZX pointed to the Port of Napier float as one on the horizon.

The regional council carries the port’s holding company at a valuation of $283.5 million, according to a BDO valuation in September last year.

Regional council chair Rex Graham said the IPO would deliver the funds need to invest in the port’s future growth while protecting ratepayers from the cost but still maintaining majority ownership and control.

“Napier Port needs significant investment to manage congestion and to prepare for future growth. It needs a new wharf, which is estimated to cost between $173-190m and a minority IPO will provide the funds to enable the port to invest in its future,” he said.

The IPO will be conducted by the newly-formed Napier Port Holdings, which will prepare and lodge a product disclosure statement setting out the details of the IPO.

Napier Port chair Alasdair MacLeod said the port was looking forward to bringing an offer to the public after many months of work and planning.

“We look forward to telling our story more broadly once the PDS is released to the public,” he said.

Port of Napier reported a record net profit of $17.8 million for the year to September from revenue of $91.7m. The company paid a dividend to its council owner of $10m for the year while capital investment amounted to $15.7m.

In November,  the port was granted resource consent to build a sixth wharf, which will service the container terminal and free up other wharves for its growing log and general cargo trade. It will also allow visits from cruise ships which have to be turned away at present because the port can't accommodate larger vessels.

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