Brian Gaynor on Ports dispute

Brian Gaynor has a very good article in the NZ Herald about the Ports dispute that has some very good numbers that show why it is that POAL needs to sort the union in order to survive.

The best paragraph though is where he talks about why PoT is doing so well and why the government should look to them as they move forward with their Mixed Ownership Model for state assets.

POT is an excellent model for the proposed partial sale of the Crown-owned electricity generators and Solid Energy.

The port company had a 10 per cent ownership restriction, a strong board and management and has performed exceptionally well as a listed company under the public/private ownership model.

In 2002, the company had a capital return of $7 per cancelled share on the basis of one share for every eight shares held, and the following year it had a two-for-one share split. Thus an investor who bought 1000 shares for $1050 in the IPO has had $875 of capital returned, and the remaining 1750 shares are now worth $17,850 at $10.20 a share. These figures do not take into account total dividends of more than $370 million over the two decades.

In other words, POT’s sharemarket value has surged from $80 million to $1368 million over this 20-year period and the Bay of Plenty Regional Council, which still owns 55 per cent, has been a major beneficiary of this.

Far from the imaginings of Labour that mixed ownership destroys wealth, instead it increases it and the Regional Council now has an asset worth more than when they “sold it down” as the socialists like to say. Compare that with the socialist experimentation of Mike Lee:

Ports of Auckland listed on the NZX in October 1993, following the sale of 39.8 million shares or 20 per cent of the company by the Waikato Regional Council at $1.60 a share. This gave the company a sharemarket value of $318 million, with the Auckland Regional Services Trust retaining its 80 per cent stake.

Between 1995 and 2002, the company had two capital returns and three special dividends as it sold off surplus land. During this period it had total capital returns and dividends of $556 million, well in excess of POT’s payouts.

On April 1, 2005, Auckland Regional Holdings, which had retained its 80 per cent stake, announced a takeover offer for POA at $8 a share, valuing the company at $848 million. This compared with the pre-bid price of $6.44 a share and Grant Samuel’s valuation of between $7.68 and $8.55 a share.

POA’s share price had reached $8.66 in 2003, but slumped after the December 2003 announcement that NZAX (P&O Nedlloyd and NYK) would transfer its services from POA to POT representing about 45,000 TEUs (containers) per annum.

The $8 a share bid was successful, POA was delisted and is now 100 per cent owned by Auckland City.

The difference is stark.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.