Port looks at major decisions

Port Otago is expecting to make a decision within six weeks on when it might start its multimillion-dollar dredging programme.

At its board meeting on Tuesday, both the dredging programme and the port company's 15.5% stake in competitor Lyttelton Port of Christchurch (LPC) were discussed, Port Otago's Dave Faulkner said, when contacted yesterday.

Port Otago has several dredging options, and is putting in place eight water clarity monitoring sites around Dunedin's harbour and seeking expressions of interest from international dredging companies.

''There's been no [start] decision on dredging, but that should be made within six weeks,'' Mr Faulkner said.

Port Otago's controversial takeover-blocking stake in LPC, which cost $37 million in early 2006, at $3.20 per share yesterday was valued at $50.7 million - $13.7 million up on the purchase price.

Without dividend payments, the question arises whether the $50.7 million could be put to better use elsewhere; as either an investment, in capital expenditure or used to pay off debt.

Port Otago is estimated to have received $2.7 million in dividends, but LPC had suspended all dividends, including to the 75% shareholder the Christchurch city council, since late-2010.

When asked about retaining or selling the stake, Mr Faulkner said it was ''prudent'' to wait until listed LPC delivered its half-year financial report to the stock exchange, scheduled for February 28.

''We'll wait for the half-year report and the dividend policy,'' Mr Faulkner said.

LPC was hard-hit by the Canterbury earthquakes and had not been paying dividends, but in December settled with its three insurers on a full and final payout of $450 million.

- simon.hartley@odt.co.nz

 

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