Five Waikato councils are struggling to balance the books and keep rates down while sitting on a significant shareholding in the region’s airport. Senior writer Mary Anne Gill poses the question, is it time to sell up?
Hamilton Airport. Photo: Shaun Jeffers.
How much is Hamilton Airport worth?
On paper about $234 million, which makes the strategic decision by Hamilton City, Waipā, Waikato, Matamata-Piako and Ōtorohanga councils to pay $2.125 million in 1989 seem a pretty astute one.
Despite some rocky years – which included a $12 million call on shareholders in 2008/2009 – Waikato Regional Airport Ltd, the company that manages the operation, says it is well placed to kick on and increase shareholder value.
But Auckland City Council’s decision to sell seven percent of its 18 per cent stake in Auckland Airport for $836 million to reduce debt has put the Waikato councils’ investment back in the spotlight.
Ewan Wilson
What could Hamilton City Council do with $117 million right now – it owns 50 per cent – or even as city councillor Ewan Wilson suggests in an exclusive Waikato Business News column, a percentage of that and more dividends? The city council got its last dividend of $250,000 in the financial year ended June 30, 2023.
Hamilton mayor Paula Southgate, in a recent column, said the council had considered selling a portion of its airport shares, but “this is not wise at this time, although we have pursued dividends”.
Paula Southgate
There is little appetite from the other mayors for them to follow Auckland mayor Wayne Brown’s lead and sell their districts’ shares.
Waipā, Waikato and Matamata-Piako own 15.6 per cent each of the shares while Ōtorohanga has 3.2 per cent.
Waipā mayor Susan O’Regan went as far as saying it could be beneficial for her council to buy more shares in the airport if they could. Shareholding councils get the first option to buy if others want to sell.
“It could be beneficial to buy more if we were ever in the position to.” – Susan O’Regan.
Susan O’Regan
Hamilton Airport sits at the northern end of the Waipā district, prompting its deputy mayor Liz Stolwyk to often suggest a name change should be considered.
Waipā district plan changes opened the airport up to industrial development, transforming what had been maize and hay paddocks into Titanium Park.
“We are very fortunate to have such a strategic asset in the Waipā district,” said O’Regan, who confirmed the council had not discussed the shareholding’s future and it had not been signalled for review.
Max Baxter
“The recent plan change opens up a good amount of airport owned land and the share value is likely to increase substantially in future years which means it could be beneficial to buy more if we were ever in the position to.”
Ōtorohanga mayor Max Baxter said his council had no intention of selling its shares while Matamata-Piako mayor Adrienne Wilcock said it had not even been discussed, so its current position was to retain them as a strategic investment.
Adrienne Wilcock
Waikato mayor Jacqui Church said the airport company had worked hard to be the best regional airport and council would retain its shareholding as a strategic investment.
“It (airport company) is well managed and governed,” she said. “It has diversified and strengthened over the past few years. The council is supportive of the airport as a regional asset and will continue to support the airport through its shareholding for the foreseeable future.”
Jacqui Church
Outspoken Waikato district councillor Mike Keir recently advocated for 20 per cent plus rate increases to maintain the district’s “tired and non-compliant infrastructure.”
But he would not sell the airport shares despite Waikato’s percentage being worth $36.5 million.
“This council asset is likely to see some good growth in value over the medium term and should also be able to pay dividends so council should hold to maximise its return.
Mike Keir
“That is not to say divestment should not be considered in the future but in my book, now is not the time,” said Keir.
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