POT
13/08/2013 15:02
ASSET
REL: 1502 HRS Port of Tauranga Limited (NS)
ASSET: POT: Tauranga and Timaru Ports Agree Strategic Alliance
TAURANGA AND TIMARU PORTS AGREE STRATEGIC ALLIANCE -
A NEW ERA FOR NEW ZEALAND FREIGHT
New Zealand's leading international freight gateway, Port of Tauranga, has
today announced a strategic alliance with PrimePort Timaru that will herald a
new era for New Zealand freight.
For a total investment of $21.6 million, Port of Tauranga has agreed to:
- Acquire a 50% shareholding in PrimePort, excluding its investment
properties;
- Lease PrimePort's container terminal for up to 35 years;
- Acquire the container terminal operating assets and set up a new Port of
Tauranga wholly owned subsidiary, Timaru Container Terminal Limited, to
operate the terminal
The transaction is subject to the successful outcome of the Timaru District
Council's public consultation process.
Port of Tauranga Chief Executive, Mark Cairns, said "Port of Tauranga
continues to invest in becoming New Zealand's hub port. We see opportunities
to grow PrimePort Timaru as a marshalling point for South Island cargo.
"The alliance with PrimePort will allow South Island exporters and importers
to benefit from the large number of international services that call at
Tauranga, share the significant freight savings that will come with the
arrival in New Zealand of the next generation of large ships and benefit from
Port of Tauranga's container terminal expertise and world class productivity.
"Port of Tauranga has the financial strength, location and transport
connections to be New Zealand's hub port. Not only can Tauranga Container
Terminal accommodate large ships, with our significant land holdings we have
the potential to continue to expand at a lower cost than all other New
Zealand ports."
PrimePort Chairman, Roger Gower, said: "The alliance with Port of Tauranga
positions PrimePort well for the future for the movement of both bulk and
container cargoes. We expect this alliance to hasten the consolidation of
freight routes in New Zealand by facilitating a more extensive schedule of
coastal shipping and rail. It will allow for the redevelopment of Timaru port
and the transport infrastructure in the region and the development of
flexible and cost-effective routes to and from international markets for
South Island exporters and importers.
"Over the last twenty years, Port of Tauranga has grown to become New
Zealand's largest and most efficient container terminal. We believe it is
best placed to assist PrimePort to achieve its potential in the South Island.
We are delighted with the alliance."
Port of Tauranga Chief Executive, Mark Cairns, also said: "Port of Tauranga
and PrimePort share many customer relationships. PrimePort is located in the
heart of one of the country's leading primary production regions, while 75%
of the South Island's population is located within a 200 km radius of its
gates.
"PrimePort is ideally positioned to tranship more South Island cargo across
Port of Tauranga's container terminal. It also has the capacity to grow. In
2008, PrimePort was handling 80,000 TEU a year. However this number has
declined as shipping lines have rationalised port calls in New Zealand.
"Port of Tauranga offers greater flexibility and choice to exporters and
importers with more than fifteen international services calling at Tauranga
Container Terminal.
"We are looking forward to working with PrimePort to develop opportunities to
ship coastally and realise the significant economic benefits that the next
generation of ships offer the national economy.
Based on current trade volumes at PrimePort, we expect the EBITDa from our
investment to be approximately $1.5 million per annum."
For further details, contact:
Sara Lunam
Acting Chief Executive
Port of Tauranga
Tel: +64 7 572 8856
Mob: +64 21 536 444
Roger Gower
Chairman
PrimePort
Tel: +64 3 687 2700
Mob: +64 275 914 112
Notes for editors:
Terms of the agreement:
- Port of Tauranga pays $21.6 million for 50% shareholding in PrimePort
Timaru and the container terminal assets.
- Port of Tauranga leases the container terminal from PrimePort for an
initial term of 15 years with rights of renewal taking the total term to 35
years. It is responsible for the container terminal wharf maintenance while
Prime Port covers capital expenditure.
- Port of Tauranga's purchase includes all plant associated with the
container terminal including cranes, forklifts and mobile plant
- Port of Tauranga will, through a wholly owned subsidiary, the Timaru
Container Terminal Limited, lease and operate the container terminal.
- Port of Tauranga is funding the acquisition from within current bank
facilities.
- Completion is subject to a successful outcome from the required month-long
Timaru District Council public consultation process. This will commence on
17 August 2013.
About Port of Tauranga: www.portoftauranga.co.nz
Port of Tauranga is New Zealand's largest port and the country's
international freight gateway. It operates wharves at Sulphur Point and Mount
Maunganui in Tauranga, as well as MetroPort, a rail-linked inland port in
South Auckland. The Port of Tauranga Group includes:
- Tapper Transport Limited - New Zealand's largest wharf cartage company and
operator of a container freight station adjacent to MetroPort Auckland, which
includes Priority Logistics - a Bay of Plenty based transport and freight
handling operation.
- Quality Marshalling Limited - New Zealand's second largest log marshalling
and scaling company, with operations at Mount Maunganui, Northport, Murupara,
Rotorua, Kaingaroa, Napier and Auckland.
- Northport Limited - a joint venture with Northland Port Corporation,
operating a deep water commercial port at Marsden Point.
- MetroPack Limited - a container packing and unpacking facility based in
Auckland.
- MetroBox Auckland Limited - a container cleaning, repair and storage
facility at MetroPort, operated in a joint venture with KiwiRail.
- Cubic Transport Services Limited (37.5% ownership) - specialists in moving
freight within New Zealand.
About PrimePort Timaru: http://www.primeport.co.nz/
For more than 125 years, PrimePort Timaru has linked South Canterbury to
international markets.
More than 75% of the South Island's population lives within a 200 km radius
of its gates, while its immediate freight catchment hosts the second largest
dairy processing plant in the world; the largest wool scour in the Southern
Hemisphere; five export meat processing plants; five export timber plants and
five export fishing companies. PrimePort's exports are mainly primary
products destined for international markets, while most imports are destined
to service the agricultural community.
It is currently 71.43% owned by the Timaru District Holdings Limited, a
wholly owned subsidiary of Timaru District Council, and 28.57% owned by Port
Industry Holdings Limited, a group of nine local private interests.
QUESTIONS & ANSWERS:
1 What are the terms of the proposed deal?
- Port of Tauranga pays $21.6 million for 50% shareholding in PrimePort
Timaru and the container terminal assets.
- Port of Tauranga leases the container terminal from PrimePort for an
initial term of 15 years with rights of renewal, taking the total term to 35
years. It is responsible for wharf maintenance while PrimePort covers
capital expenditure.
- Port of Tauranga purchases all plant associated with the container terminal
including the cranes and mobile plant.
- PrimePort's investment properties are not part of the sale to Port of
Tauranga Limited. These transfer from PrimePort to Timaru District Holdings
Limited for use in future port-related developments.
- Port of Tauranga is funding the acquisition from within current bank
facilities.
- The agreement is conditional on PrimePort Timaru's controlling shareholder
the Timaru District Council (via Timaru District Holdings) holding a public
consultation process over the reduction of its shareholding to 50% in the
port.
2 Who are PrimePort Timaru's shareholders and have they agreed to the
alliance?
- PrimePort is controlled by Timaru District Council via its 100%
shareholding in Timaru District Holdings Limited, which has a 71.43%
shareholding in PrimePort. The remaining 28.57% is held by Port Industry
Holdings Limited (private interests).
- Timaru District Holdings Limited has approved the alliance and Timaru
District Council has voted in favour of it and has committed to taking this
decision through the public consultation.
- Port Industry Holdings Limited has agreed to sell 100% of its shareholding
to Port of Tauranga Limited.
3 When is the Council due to make its decision?
- The public consultation process commences on 17 August 2013 and completes
on 17 September 2013.
- Submissions are being called for during this period.
- A public meeting is planned for 24 September 2013 to consider any
submissions.
- The Timaru District Council will meet on 8 October 2013 to finalise their
decision.
4 Are there any other conditions to the deal?
- For Timaru District Holdings to sell to 50% requires shareholder (Timaru
District Council) approval and public consultation is required as part of
that process.
5 When does the deal go unconditional?
- The deal is due to go unconditional on 11 October 2013.
- Port of Tauranga will commence operating the Timaru Container Terminal on 1
December 2013.
End CA:00239610 For:POT Type:ASSET Time:2013-08-13 15:02:20
