NRC Given Green Light To Consortium Takeover Of MMH
The Northland Regional Council (NRC) was today (subs: Tuesday 22 April) given the green light from its councillors to proceed with a takeover of Marsden Maritime Holdings (MMH).
The council revealed in late February it was a key figure in a consortium seeking to bring full control of Marsden Point-based Northport under a single ownership umbrella via a new joint-venture company combining MMH and Northport.
Councillors at their monthly meeting in Whangārei today voted unanimously to amend council's Te Mahere Roa | Long Term Plan 2024-2034 (LTP) to change the structure of its interests in Marsden Maritime Holding and Northport.
Council Chair Geoff Crawford says: "Today's decision paves the way for us to proceed with our plans to unite the land assets of MMH with Northport and in doing so give NRC a much larger holding in this important local asset."
Under the proposal, NRC would hold a 43% stake in the new company holding the assets of both MMH and Northport. Port of Tauranga would hold a 50% stake and Tupu Tonu (Ngāpuhi Investment Fund Ltd) would hold a 7% stake.
NRC and POT would have equal decision/voting rights. (Northport is currently owned 50/50 between Port of Tauranga (POT) and MMH; under the proposed deal POT would have a 50% share in the merged entity).
Council's consortium partners welcomed today's announcement, jointly commenting: "With that approval now given, our combined offer to buy out the minorities in MMH at $5.60 a share scheme offer can proceed."
"We now await the Independent Appraiser's report and scheme documents ahead of a special meeting of MMH shareholders expected to be held next month where shareholders will vote on the sale of shares to the consortium."
The consultation process was required because NRC's interests in MMH, including the Northport shares MMH holds, were classed as a strategic asset the council was required to consult on its proposal as an amendment to its LTP.
That consultation ran from 26 February until 28 March and the council received a total of 42 feedback forms.
Chair Crawford says, "Overall feedback was positive, however, this was tempered by a number of questions and concerns about the details of the proposal."
Submitters in favour of the proposal voiced strong support for bringing the ownership of MMH and Northport closer to Te Taitokerau, simplifying the ownership structure and enhancing economic growth for the region.
Submitters who expressed opposition to the proposal had raised concerns about the potential loss of control and the perceived inconsistency of iwi/hapū now wanting to buy in after previously opposing Northport's development.
They also felt council should not participate in any restructure that could become part of treaty settlements, as the council's role is to serve ratepayers.
Other submitters expressed concerns about the proposed change in ownership composition of MMH and Northport, and that council would lose its controlling share. Concerns were also raised about a potential loss of annual dividend payments if council divests some of its shares.
However, Chair Crawford says the proposal would give council a bigger stake in the revenue-generating elements of the assets, including the port. "Investment revenue helps subsidise rates and pay for the services council delivers."
He reiterated earlier comments that the NRC's share of the proposed deal is not expected to impact rates. The additional $40.78 million required from council - on top of its current shareholding in MMH - would be paid for by borrowing from the New Zealand Local Government Funding Agency as well as selling some of the council's non-strategic property assets.
He says that under the proposed deal the council would hold a much bigger stake in the resulting new-look Northport.
"The way MMH is structured now means council, with its current 53.6% share, effectively owns only 26.8% of Northport."
"The current ownership model, with MMH being an NZX listed company also means that NRC has no influence or control over what happens at the port other than through the appointment of directors onto MMH."
"In contrast, as part of the consortium proposal the council would own 43% of Northport and would have much more access to information, influence and decision making over the future of our region's port."
Council has earmarked an additional seven percent for other iwi and hapū with interests within the rohe (area) of the Whangārei Harbour, should they wish to take this up as part of their treaty settlement process. While this would effectively reduce council's shareholding to 36%, council would remain 50/50 decision making with POT.
Council's consultation had included direct communication with both iwi and hapū who had an interest in the Whangārei Harbour, communications to previous LTP submitters and to council's 'Have Your Say' subscription list, council's tāngata whenua contacts, and key business groups.
"Wider promotion during the consultation period occurred via digital advertising, social media, public notice, media releases and council's website, and by way of a Consultation Document."
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