Auckland Airport is sitting on a sizeable profit from its controversial quarter-share investment in its Queenstown counterpart.
A new Queenstown Airport document says its directors put a minimum asset value of $184.85 million on the business.
Having paid $27.7 m in July 2010 for 24.99 per cent, this means Auckland Airport has a paper profit of $18.5m – 67 per cent higher than the purchase price.
Skyline Enterprises chairman Ken Matthews was among a group of prominent local businessfolk hotly opposing the sell-off – and news of Auckland’s profit has raised his temperature again.
“The stake was under-valued and under-sold and the community is all the worse off for that,” Matthews says.
“The airport’s value is only going to increase every year and it’s a shame the activities of the former board show the folly of selling out at that particular time.”
Queenstown Airport’s then-board did the Auckland deal in virtual secrecy.
Despite the resort airport being community-owned via Queenstown’s council, councillors were briefed just before the deal was publicly announced.
As well as the lack of council consultation, the other bone of contention was that Auckland Airport was the only contender – the market wasn’t tested.
But a PricewaterhouseCoopers report subsequently commissioned by the council maintained the price was “above market” and “only a buyer identifying strategic values would pay that price”.
Ousted Queenstown Airport chairman Mark Taylor, forced to resign after doing the deal, welcomes the high valuation by the airport’s new board.
“While Auckland Airport may have made a paper gain, so has Queenstown’s council on its 75.1 per cent,” Taylor says.
“And it was the new capital from the Auckland sale which facilitated that.”
Taylor says the $27.7m Auckland paid allowed Queenstown Airport to provide new infrastructure to capture passenger growth and increase earnings.
So you’d expect the airport’s value to climb, he adds.
“Obviously it’s been a good deal for both Auckland Airport and the Queenstown community.”