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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  • Anonymous

    This is why Labour are a joke when they talk about the mixed-ownership model. They don’t have a clue.

  • Kiwicanary

    Agree with Thor42. Good article and if Labour are serious about wanting to govern the country again they have got to stop pandering to the lazy-arses out there. I can’t ever vote for a party that encourages laziness and that is what the Labour Party is in my eyes.

  • Wetfootmammal

    Great then – time for the government to by a controlling share in all the major power companies and Telecom. Let’s get these price-gouging capitalists under control.

    • niggly

      So, how about the Govt’s controlling share be 51%? ;-)

  • Charlie Kura

    Why not have the Auckland Council retain the port land, sell the plant and lease out the facility to an independent operator who knows what they’re doing. Council can then focus on what they are best at – issuing parking tickets outside eastern suburbs schools.

  • Steve and Monique

    If only our local Times could write an article for more than just tomorrows fish n chips. They have a story about the Ports strike from mainly the wharfies and families side. One wife of a wharfie says she would effectively become a solo mother. “I couldn’t plan anything, I think it would spell the end of a lot of marriages, My kids will forget what their father looks like” Did you even think about the wives/husbands of Police Officers in the same boat? They have more right to whinge than the wharfies do! A wharfie says “the dispute has been hard because i’ve got three kids and i’m the only one in the family working. I wouldn’t come back to work here if it was for a contractor. I’m sure they wouldn’t offer good hours and my family is more important than that”. Guess what mate, you have just joined the real world. You must be in a good position to “choose” not to work for a contractor. There are many people in this country in the same predicament as you, my husband for one, and they don’t earn half of what you do! Our family doesn’t have a choice, we have to do it to survive. Stop whining you greedy bunch of feckers, as for the Union, they only want your money and once you’re out of a job, they won’t even remember your names.

  • Steve and Monique

    If only our local Times could write an article for more than just tomorrows fish n chips. They have a story about the Ports strike from mainly the wharfies and families side. One wife of a wharfie says she would effectively become a solo mother. “I couldn’t plan anything, I think it would spell the end of a lot of marriages, My kids will forget what their father looks like” Did you even think about the wives/husbands of Police Officers in the same boat? They have more right to whinge than the wharfies do! A wharfie says “the dispute has been hard because i’ve got three kids and i’m the only one in the family working. I wouldn’t come back to work here if it was for a contractor. I’m sure they wouldn’t offer good hours and my family is more important than that”. Guess what mate, you have just joined the real world. You must be in a good position to “choose” not to work for a contractor. There are many people in this country in the same predicament as you, my husband for one, and they don’t earn half of what you do! Our family doesn’t have a choice, we have to do it to survive. Stop whining you greedy bunch of feckers, as for the Union, they only want your money and once you’re out of a job, they won’t even remember your names.

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