Port to return $67m

Port of Tauranga is planning a return of $67 million of capital to shareholders through a share cancellation.

The return of surplus capital will be on a pro rata basis.

The proposal is subject to a ruling from the Inland Revenue Department confirming that it will be tax free, and High Court approval of the one-in-eight share cancellation.

Chairman Fraser McKenzie said yesterday the capital reduction would improve the financial structure of the Port of Tauranga, maximising the return on money employed in the business.

Mr McKenzie said the directors had decided that returning surplus capital now was in the best interests of all shareholders, and would allow the company to improve its return on shareholders' equity for the future.

Shareholders will be paid $7 for each share cancelled.

"This will give rise to the cancellation of approximately 9.6 million shares leaving approximately 66.9 million shares on issue at the completion of the transaction."

Port of Tauranga hoped to complete the process as quickly as possible once it received the necessary approval.

The majority holder of the company (55.3 per cent) is Quayside Securities, an investment vehicle for the Bay of Plenty Regional Council.

The dividend distribution policy would remain the same after the capital reduction.

The shares closed at $7.

- NZPA