A decision is expected to be announced in November on an almost year-old merger proposal between rival southern ports, Port Otago and Lyttelton Port of Christchurch (LPC).
Auckland consultancy company Antipodes is understood to be putting the finishing touches to its report on the proposal.
The report is expected to be delivered to LPC's board by mid-October - almost a year after the merger was first mooted.
Among the options raised last year was whether Port Otago could become a listed entity, or LPC delisting, while separate research suggests LPC's owner, the Christchurch City Council, could be owed $90 million if a merger went ahead.
LPC chief executive Peter Davie said yesterday the report was due in mid-October, but because it was commissioned for LPC's board, it would not be made public.
The Antipodes report would be considered by LPC's board first, with "some discussion" with Port Otago, before a decision was made about four to six weeks later.
"We will go to the market [to make the announcement] as all shareholders have to be informed at the same time," Mr Davie said.
Port Otago is 100%-owned by the Otago Regional Council while listed LPC is is 78%-owned by the Christchurch City Council, 15% Port Otago and the balance in the sharemarket. In the past 20 years, Port Otago has delivered $56.5 million to the ORC.
In outlining the proposal last October, the pair said they would each retain ownership of their respective physical assets, wharves and land, but under one controlling company and one board.
Research by Craigs Investment Partners said after the pair signed a memorandum of understanding on October 30 last year, an early resolution to discussions was not expected.
Craigs said that of the two, LPC had higher earnings before interest, tax, depreciation and amortisation. Based on this, a possible "merger of equals" scenario, for a 50:50 split, could have LPC owner, the Christchurch City Council, owed about $90 million.
Thirty million dollars of that could be paid on the merger and $60 million through special or annual dividends linked to operating performances.
The research said the merger scenario excluded Port Otago subsidiary Chalmers Property, which had been a strong contributor to Port Otago's bottom line in recent years, until property revaluations undermined overall profits.
In March 2006, Port Otago took a contentious $37 million 15% blocking stake in LPC, effectively scuppering a deal whereby LPC was to be delisted and sold to an international port management.
The global recession has driven home the need for shipping line and port rationalisation in the face of falling cargo volumes, depressed commodity prices and ships mothballed worldwide.
Recent rationalisation by Fonterra resulted in a major withdrawal of services from the ports of Timaru and Taranaki, which also affected Port Otago with the loss of 25,000 trans-shipment containers.
Port Otago is facing a tight year ahead, having this month forecast an expected combined loss of 42,500 containers this year, with revenue expected to be down by $4 million; and it has also indicated the likelihood of redundancies among its 320 staff.
• Port Otago is due to deliver its summarised full-year financial report to the ORC today.
