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Jessica Ellerm introduced the item,
explaining the purpose of the proposed council controlled organisation will
be to provide an an efficient and effective structure
to facilitate a potential Napier Port minority share issue. Discussions and
queries traversed:
·
The details of the parameters around the
potential IPO, with initial offering of between 33% and 45% as resolved by
Council 19 December, however consultation of “up to 49%” allows
some flexibility for the future
·
HBRIC holds Council’s shares, and Napier
Port would offer additional ‘new’ shares to raise the capital
required for development – this proposal is to bring those two
processes together for a single combined share listing to simplify the
transaction
·
In order for HBRIC to hold 100% of the
combined total of shares for sale, HBRIC would have to aquire the capital to
purchase the newly issued Port shares first before then selling or issuing
those shares to the public along with those it already holds
·
The new CCO – HoldCo – would
continue as a company, being the listed company and administrative body for
Napier Port
·
Structure most commonly used, most simple to effect
the IPO transaction
·
The Chairman invited Dave Marden
(representative of the Port union and employees present) to speak to Council.
Mr Marden expressed the uncertainty Port employees are feeling and facing, a
view that the current level of Port debt is the result of irresponsibility and
the HBRC expectation of being paid a dividend each year. He also raised
concerns that if things go ‘pear shaped’ the workers conditions
are ‘first to go’. Suggested that the CCO consultation period
proposed is not long enough and Council needs to consider the different ways
people can and/or need to be able to make submissions. Mr Marden confirmed
that the group supports Napier Port expansion, knowing that it needs to grow,
and concerns are about the potential negative effects of a share listing on
workers and their families.
·
Consultation is very specifically on the
proposed CCO model, a process step, and councillors are not under any
obligation to consider submissions unrelated to that matter. The process is
seeking feedback on what people like about the proposal and what they
don’t like – not a simple yes or no tick box, and not about the
substantive decision already consulted on about whether to progress with a
potential IPO transaction.
·
In responding to a query from a member of the
Port employee group, it was explained that, through the proposed single CCO
model, the HoldCo board will be the same directors that sit on the Port board
of directors, appointed as the result of a transparent recruitment process
and based on their qualifications and experience – which must meet
Companies Act and Port Companies Act requirements and liabilities.
·
Mechanisms for Council to exert control over
the Napier Port board of directors are through the company’s
constitution, in the ability to appoint up to 2 directors to the Board and
the ability to “fire” the board in its entirety (as it currently
can).
·
Council’s intention is not to benefit at
the expense of Port employees or their working conditions.
·
Following discussions it was agreed that the CCO
consultation period would be extended to 3 weeks, ending on 11 March.
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