Port of Tauranga debt scheme secures rating approval

By DANIEL RIORDAN

Port of Tauranga, poised to return $67 million of capital to shareholders, has had its latest debt programme rated A-2 (satisfactory) by Standard & Poor's.

The port company is raising $250 million by issuing short-term commercial paper, supported by a $195 million standing overdraft. The money will be used to refinance existing debt and for general corporate purposes.

S&P says the company's strengths are its position as New Zealand's leading bulk export port, its improved competitive position for container trade, and its "moderate" financial profile.

Offsetting those in S&P's opinion are the port's modest service area and low cargo density.

The agency also points to the port's "evolving" business profile following its move to buy log marshalling business Owens Services BOP.

S&P's long-term rating for the port company is BBB+ with a stable outlook.

The debt raising is part of a restructuring of the port company's balance sheet that also involves a $67 million return of capital to shareholders.

The company has High Court approval for the redistribution, which involves cancelling one in every eight shares and paying shareholders $7 for each share cancelled.

About 9.6 million shares will be cancelled, leaving 66.9 million shares on issue.

The company last year obtained a binding ruling from Inland Revenue confirming that the distribution would be tax-free.