Antipodes

Antipodes Antipodes Lyttelton Port of Christchurch is expecting an independent report on a proposed merger with Port of Otago in about six weeks – but it will not be making it public.

LPC chairman Rodger Fisher said the company would probably advise the market when it had received it.

Auckland consultancy Antipodes was jointly appointed by the two ports to investigate the potential benefits.

The two port companies will consider the report and Fisher said LPC would form a view and make a recommendation to its shareholders. That would be disclosed to the sharemarket.

The shareholders are Christchurch City Holdings, the investment arm of the Christchurch City Council, owning 78.16 per cent, Port of Otago with 15 per cent and the small remaining amount is owned by other shareholders.

Any decision to merge would have to be voted on by shareholders at a special meeting. It would also probably require consideration by the Commerce Commission to see if a merger of the two largest South Island ports substantially lessened competition.

Fisher said all those issues were expected to be examined and commented on in the report. The process of exploring the merger, after a memorandum was signed last October, had taken longer than expected.

The proposal was complex. It involved setting up a jointly owned company to run the two ports but each of the ports’ assets would remain locally owned by respective councils, he said.

Fisher said next year was expected to be challenging but Lyttelton forecast its profit would “exceed $10 million”.

Fisher acknowledged it was a conservative forecast because Lyttelton and KiwiRail had just won the business of transporting and handling Fonterra’s milk powder produced at Clandeboye in South Canterbury.

That could boost container volumes by 10 per cent.

The company was being prudent in its outlook because there was still uncertainty about a recovery, with exporters concerned about the level of the dollar.

However, LPC was in a strong financial position with comfortable debt levels.

“There’s not an issue in getting further funding if we require it,” Fisher said.

Meanwhile, LPC posted a no surprises $10.05m profit for the year to June yesterday in line with its guidance through the year.

Directors declared a dividend of 3.4c a share fully imputed for the second half of the year which will be paid on October 29. It brings the total dividend for the year to 4.9c a share compared with last year’s 5.1c a share.

Christchurch City Holdings, with 78 per cent of the LPC shares, will enjoy total dividends from the port company of $3.9m for the June 2009 year.

Fisher said the port had completed a good but challenging year considering the international downturn.

Source:1samachar.us

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