Auckland Council puts Auckland Airport sell-off advisor on 'pause'

Auckland Council says it has “paused” appointing a consultant to advise it on the sale of its 18% stake in Auckland Airport.

The Council had posted a tender asking for expressions of interest for independent advice on selling down the shares, with an expected start date of March 2023.

In an emailed statement, Auckland Council acting group treasurer Francis Caetano said no decision had been made to sell the Council’s 18% stake in the airport. 

The Council had decided to “pause” the appointment of an advisor on the sale of Auckland International Airport shares while council worked through the budget process, the statement said.

Auckland Mayor Wayne Brown has pushed the sale of the airport shares, saying it would raise nearly $2 billion in much needed funds.

The tender document said the Council needed advice including on strategies to maximise value, a communication strategy and investor engagement.

It said the consultant would be expected to provide independent advice on the transaction execution process and provide analysis so any sell-down was completed efficiently, cost effectively and successfully.

Brown says the airport is costing Aucklanders money. He said Auckland ratepayers will pay $88 million in debt servicing costs to maintain a non-controlling shareholding in the airport.

The airport hasn’t been paying dividends and has seen its fortunes dented by the pandemic, but is expected to recover now that tourist numbers are rebounding.

But Brown says ratepayers have paid $240m in debt servicing costs to hold shares that “haven’t paid a cent in dividends”. 

“The cost of holding these shares exceeds any return, and forecasts suggest this situation will not be reversed for Auckland Council as a shareholder in the foreseeable future. There are better uses for ratepayer capital.”

The Council is taking feedback on its annual budget until March 28.