How to make a good deal better

Amid the controversy over the sale of Queenstown airport shares, Nick Smith, business manager and director of Allied Press, has an idea to benefit the ratepayers.

STEP 1:
Queenstown Lakes District Council (QLDC) promotes the sale of the equivalent of 25% new shares in the Queenstown Airport Company (QAC) and sells these to the Queenstown Business Consortium (QBC) for cash at same price as Auckland International Airport (AIA) has agreed to pay.

The airport ownership is now QLDC 50%, AIA and QBC 25% each. QLDC will now have about $50 million in cash.

Step 2:
QLDC/QAC gives an entitlement to all ratepayers on an equal basis to purchase their remaining shares at a heavy discount; the QLDC would underwrite the issue. Entitlements would not be renounceable and if not taken up would be purchased by the QLDC at the issue price.

The ownership is now: AIA, QBC 25%, the ratepayers probably 40% and QLDC about 10% [from those who passed up the opportunity to participate]. QLDC will now have $80 million-$90 million in cash.

Step 3:
Queenstown Airport lists on the New Zealand Stock Exchange.

Then:
Auckland airport, the QBC or some other entity will make a full takeover offer for all shares at a healthy premium.

If QBC is not a bidder it sells, pockets a very good profit and all its members holiday in Hawaii. The ratepayer shareholders and QLDC all double their investment tax free and say thank you.

Now the QLDC will have in cash $100 million or more and after investment should receive about $8 million per annum after tax into its coffers.

The councillors can then organise our potholes being fixed, debate Maori street names and talk sewerage just like the old days. Maybe with no airport to organise the QLDC could even shed some staff!

As the new owners (probably with airport/tourism expertise) have to maximise investment, they promote Queenstown and additional flights aggressively. Everybody benefits.