Lyttelton Port settle quake insurance claims
Lyttelton Port's insurance payout will total nearly $440 million after it settled a long-running dispute with insurers over earthquake-related claims.
The listed port company has already received $55.6m of payouts towards repairing damage that resulted from the 2010 and 2011 earthquakes.
Lyttelton and its insurers - Vero, NZI and QBE - have more recently been in a mediation process, including intensive talks over recent days.
The port put its shares into a trading halt this morning ahead of a significant announcement. That halt has now been lifted.
Lyttelton port today said the outcome of that mediated process was that all the various claims of the company against its three insurers under material damage, business interruption and contract works insurance policies have been settled.
The claims arose out of the September 2010, February 2011 and June 2011 earthquakes.
The settlements involve the payment in aggregate by the three insurers of $438.3m plus GST.
This was a gross amount of $450m minus deductibles of $11.7m in full and final settlement of the claims.
"The company has already received payments from its insurers of $55.6m, so that the total amount remaining to be paid by the insurers in respect of all of the claims will be $382.7m plus GST," the company said.
Payment will be made in full by February 28, 2014.
All the payouts received are to be used in the rebuilding and reinstatement of Lyttelton Port's facilities.
About $66m had already been spent, the company said in a statement.
"The port has flexibility on how and when assets will be reinstated."
The port company said one remained outstanding matter with a third party that might result in the company making an additional recovery. It was not in a position to provide further details at this time.
LPC chairman Trevor Burt said it had been a constructive mediation process.
"Both parties are satisfied with the outcome, coming 3-1/2 years after the first earthquake in September 2010, and recognising the complexity of the claims.
"This enables LPC to rebuild the port, with freedom to optimise facilities for the future."
The port was now looking to put in place contract works insurance cover, including earthquake cover, for the rebuild programme, Burt said.
Work was progressing on the rebuild of Cashin Quay 2 and the company expected to be able to fully insure this asset (including for earthquakes) when the reinstatement was completed.
It is anticipated that as the overall programme progresses, all assets will be able to be fully insured.
Lyttelton Port shares last traded at $2.41. They are 38 cents or nearly 19 per cent higher than they were trading 12 months ago.
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