Infratil’s sale of Fullers ferries is part of a retreat from under-performing businesses to repay debt.
The infrastructure investor yesterday announced that subsidiary NZ Bus is selling its interest in Fullers for $40 million to Souter Holdings, majority owned by Stagecoach co-founder Brian Souter. Infratil will retain its NZ Bus operations in Wellington, Hutt Valley, Auckland and Whangarei.
Infratil says the deal was part of a programme of divestments which would realise more than $100 million in this financial year. The money would be used to repay debt of about $1.2 billion including infrastructure bonds, perpetual bonds and bank debt. Infratil executive Tim Brown said the $100 million also included exercising the right to sell Lubeck Airport in Germany, worth about $60 million, and the sale of some bus depot properties in Auckland.
“In this environment we do have to look at recycling some capital and cut back on where you can’t see them generating strong returns. The short term for us is going to be debt repayment but in the medium term there are various opportunities.”
He would not comment directly on one analyst’s suggestion that Infratil’s other under-performing European airports could be next but said it was hard to run with a loss on a low-return asset in the current environment. Around 75% of Infratil’s investments, including Wellington Airport and TrustPower, were performing well, Brown said. “You have to say to yourself, can you have 25% of the business not generating a return? In this type of environment you can’t.” New Zealand Herald, 7th April 2009
I suspect that our local kerfuffle may soon be academic: Infratil withdraw, TDC look daft, and we all wonder what to do with 2.75km of runway. Out of curiosity, do any of my better informed readers have any idea what the current market value of Manston would be, either as a ‘working’ airport or as a generic light industrial site.