Airport investors to pocket $454m
Auckland International Airport shareholders will get a windfall of $454 million in April, after more than 99 per cent voted to back a capital return plan by the board.
The payout to shareholders will be equal to about 34 cents a share. The company will now cancel one in every 10 shares for the 49,000 shareholders.
The Auckland Council will be the big winner and will bank more than $100 million from its 22 per cent holding.
There will be no interim dividend payment in March for shareholders.
The vote easily exceeded the 75 per cent support required.
Shareholders will maintain the same voting rights and distribution rights.
The company said the capital return would improve its debt-to-equity ratio and align it back to 2011 levels.
Shareholder equity as a percentage of total assets will reduce from 61.5 per cent to 51.8 per cent.
It said the payout will not affect its infrastructure plans to renovate the domestic terminal and ultimately build a combined domestic and international "terminal of the future", expected to cost $2.4 billion.
The redevelopment will effectively be funded by passengers using the terminal, with numbers predicted to jump from 14.5 million to 40 million by 2045.
Chief executive Adrian Littlewood told shareholders the board of directors and management believed the company was able to return capital to its shareholders and continue to deliver on its planned strategy.
"Our proposal before you is, we believe, the most appropriate structure for a return of capital - one that is tax efficient, rewards all shareholders equally, and ensures we preserve the funding flexibility offered by a stable A- credit rating," he said. The airport is the only one in Australasia with an A- credit rating.
The New Zealand Shareholders' Association backed a buy-back price of $3.43 a share, set at the closing price of November 28. It was lower than Tuesday's closing share price of $3.66, and the shares ended lower yesterday, at $3.64.
"The proposed buyback price of $3.43 reflects the share price immediately prior to the announcement in November," the association said. "That the market price has since risen should not be of concern to shareholders, since following the share buyback the proportionate interest of each shareholder will be unchanged.
"Likewise, each investor's proportional entitlement to future dividends will remain unchanged.
"The rise probably reflects, in part, the market's positive take on the proposal, on the assumption the deal will proceed."
However, some shareholders were opposed to the payout and said the money would be better spent on infrastructure projects.
Auckland International Airport chairman Sir Henry van der Heyden said the final High Court approval was expected to be given in March and the payment to shareholders would be expected in April.
He said 40 per cent of the payment would be treated as a capital return for tax purposes, with the remaining 60 per cent to be a fully imputed taxable dividend.