Lyttelton and Otago ports move merger talks to next stage

Lyttelton Port Company Ltd (LPC) and Port of Otago Ltd (POA) are moving to the next phase of merger talks.

"The boards of Lyttelton Port Company Ltd and Port of Otago Ltd have agreed that continuing to work towards a potential operational merger is warranted," the companies said in a joint statement.

The next stage involves talks on the content of a report prepared by Antipodes Capital as part of the first stage of the project. The structure being considered involves the legal separation of the infrastructure assets from the operations and commercial activities of each port.

Any agreed proposal for an operational merger would ultimately require shareholder support and approval from the Commerce Commission, the competition regulator. The Antipodes Capital report is not being released publicly.

It was delayed last year when shipping line changes altered the trade flows in South Island ports.

Ports are looking at merging so they do not over capitalise when preparing for the next generation of large container ships.

Talks between Port of Tauranga Ltd and Ports of Auckland Ltd in the North Island failed. 
 POA and LPC said in October 2008 that they had signed a memorandum of understanding to explore a merger of their respective port operations.

The two boards have said each port will retain ownership of its land and wharves. POA is owned by Otago Regional Council and LPC is majority owned by the commercial arm of Christchurch City Council.

The board of LPC has considered the Antipodes report and also an independent review of it by Cameron Partners and decided to proceed to the next stage. Both ports were treating the project with the utmost urgency.

"This process is critical to ensuring appropriate decisions are made for the long term sustainability of port operations in the South Island and in the interests of all stakeholders."

A change in shipping services last year saw Fonterra shift more freight through LPC, rather than PrimePort Timaru.

 

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