Napier Port raises in NZ $240M in partial stock market IPO.
Having rejected the concession route to bring in a terminal operator to achieve a much needed expansion, Napier Port on New Zealand’s east coast has raised NZ $240M in an IPO.
After a long and considered process, the port’s owner the Hawke’s Bay Regional Council (HBRC) decided to float 45% of its asset Napier Port on the stock market to raise funds to pay down debt and fund a berth expansion project.
The IPO was a success, with shares being fully subscribed at NZ$2.60 per share and rising strongly in early trading. The prospect of a foreign owner for the port was a major concern when the HBRC started exploring its options, but that has not transpired at this point. Port staff, Maori Iwi and regional residents were granted priority entitlements to 20% of the shares prior to the IPO, and 97% of port employees took up the offer. The share offer was oversubscribed and at listing the port said it was “approximately 90% New Zealand owned.”
“Of the capital raised, $110.2 million is to be used to repay the Port’s existing debt and provide cash and undrawn debt facilities sufficient to meet the Port’s future capital requirements, including the construction of a new multi-purpose wharf, 6 Wharf.
“A further $107.9 million of the capital raised in the IPO has enabled the Hawke’s Bay Regional Council, to realise a portion of its investment in the Port. The remainder has been used to fund interest-free limited recourse loans to Eligible Port Employees to buy shares in the Port and to meet the costs associated with the IPO,” Napier port said in a statement.
“Our new wharf will become a vital part of the networked infrastructure we manage; easing congestion, allowing us to host the larger container and cruise ships that are already visiting, extending our container capacity and giving us new options to manage diverse cargos,” said Napier Port Chief Executive Todd Dawson.
NZ ports have a mixed history with the stock market. Both Auckland and Lyttelton were listed entities at different stages, before being delisted by the local and regional councils that held the majority of the shares. The only other listed port at present is the Port of Tauranga, which has been a listed company for over 20 years, with the Bay of Plenty Regional Council owning around 54% of its shares.