Delays for GHL review due in November

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

A strategic review into the possibility of selling off Gisborne District Council-owned commercial assets, including Tauwhareparae Farms Limited, is now five months overdue.

GDC-owned Gisborne Holdings Limited last year began a strategic review after it made a $1.9 million-loss resulting in a failure to pay its shareholder, GDC, $2.5 million of a forecast $2.7m distribution. That cost has resulted in GDC taking out a loan to cover expected losses.

The review was supposed to be completed by November last year but GDC chief executive Nedine Thatcher Swann yesterday said it was still in development.

Once the review is completed, the council would have to consider the overall group position, how it fits into the council’s strategic objectives and where it would be of most benefit to ratepayers, Ms Thatcher Swann said.

“Gisborne Holdings Limited (GHL) signalled to Gisborne District Council that a dividend could not be paid for three years, in 2023, 2024 and 2025.

“Given that council relies on the dividend for non-rates revenue, and that we’d planned for a dividend within our overall rates take for 2023 and 2024, the resulting shortfall must be covered by the council taking a loan.  This has also impacted rates for the next three years.

“GHL directors decide what they can pay in terms of their obligations as a director and in terms of their Statement of Intent.

“The loan is forecast to be $6m. And the interest rate that we would be paying on this is 5.20 percent for the current year, forecast to reduce to 4.81 percent by 2027.”

GHL has a $139 million asset base comprising Tauwhareparae Farms (62 percent), Waikanae Beach Top 10 Holiday Park (5 percent), the Wash’n Go Gisborne Auto Wash (1 percent) and property (31 percent).