Ann: GENERAL: LPC: Insurance Update 31 May 2013

• Release Date: 31/05/13 17:26
• Summary: GENERAL: LPC: Insurance Update 31 May 2013
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LPC
31/05/2013 15:26
GENERAL

REL: 1526 HRS Lyttelton Port Company Limited (NS)

GENERAL: LPC: Insurance Update 31 May 2013

31 May 2013
MEDIA RELEASE
MARKET update
The Directors of Lyttelton Port Company Limited (LPC) wish to provide the
following market update.

Insurance
Progress Payment
LPC's material damage policy entitles LPC to receive indemnity progress
payments on earthquake damaged and destroyed assets that are covered for
reinstatement. An indemnity valuation report for six key harbour structures
has been provided to insurers, which has been peer reviewed by their valuer.

Insurers have agreed to pay, as a non specific progress payment under the
material damage section of LPC's policy, a further amount of $17.4 million
plus GST towards the physical loss and damage suffered as a result of the
earthquakes.   This will bring the total progress payments to date to
approximately $53.0 million plus GST.

Reinstatement Plan Progress
LPC has received feedback from it's insurers on the draft Reinstatement and
Development Plan overview. Insurers have agreed that a number of key assets
are destroyed for insurance purposes, which has enabled LPC to proceed with
greater confidence in progressing design work on rebuilding those assets.
Reinstatement designs are underway for the container terminal wharves, with
construction planned to commence towards the end of 2013.  The insurance
policy requires LPC to reinstate it's assets with reasonable despatch. LPC
remains confident that it is taking all necessary steps to put the plan into
action as fast as reasonably possible; this being in the interest of LPC, its
stakeholders and also it's insurers.

Insurers have confirmed that they are proceeding on the basis that LPC's
assets are covered for reinstatement.  Insurers will be reimbursing LPC as it
incurs reinstatement costs, under the "Pay As You Go" (PAYG) policy.  As LPC
reinstates it's infrastructure, funds are expected to flow as the costs are
incurred in line with the PAYG process.
LPC is developing cost estimates on that basis; however there is uncertainty
over the extent to which this programme of works will be fully funded from
insurance proceeds.  Insurers have a view that there is a limit on their
liability per asset, albeit in certain circumstances they reserve the right
to contend that cover is on an indemnity basis; LPC does not accept either
position. The full extent of this matter will not be known until the designs
are fully developed and costed.
General
Throughout the course of the reinstatement of assets, it is anticipated that
there will be many complex issues. However, LPC is committed to working
constructively with it's insurers to resolve matters expeditiously as they
arise.

Dividends
LPC will be reviewing the payment of dividends at the 2013 year end; it is
anticipated that the payment of dividends will resume in the first half of
2014.

LPC will be making no further comment on this release.

-Ends-
End CA:00236945 For:LPC    Type:GENERAL    Time:2013-05-31 15:26:47