We all know that Manukau has held its airport shares since the inception of the amalgamated city in 1989 and we inherited at that time just over 9 per cent.

We increased our shareholding four years ago to a little over 10 per cent to ensure we would need to be referred to in the event of a takeover bid and secondly, it assisted us in acquiring a seat at the directors’ table.

Two years ago the airport company was involved in a process of dealing with two or three potential bidders for a shareholding in the company. The last and most serious bid came from a Canadian pension fund. The government of the day intervened to stymie the finalisation of a potential share interest offer from the Fund.

Our council indicated it was not happy with the proposed bid.

We were keen to encourage a shareholder to purchase something between a 20 to 30 per cent interest in the company, on the basis that two strategic benefits might eventuate from the shareholding investment.

First, the potential investor would have a strong airline/airport history and therefore be able to add a significant intellectual and commercial property horsepower to the company from their experience. Secondly, the investor would be able to help expand routes into new markets and encourage new airlines to access New Zealand through this airport.

What the airport company proposed in this most recent commercial venture is to open up, through its purchase of a shareholding in two airports in Queensland , Australia , the possibility of new route development into Asia and China . This would also encourage the growth of the number of airlines coming into our country. In other words, achieve what we wanted two years ago.

One of the risks of being a shareholder in a publicly listed company is that these companies move quickly to preserve their commercial viability.

We had to make a fast decision on whether we would take up our share rights issue to approximately $12,6m. If we did not, our airport shareholding would have reduced to 9.4 per cent.

We have a standing council resolution not to allow our airport shareholding to diminish below 10 per cent. On the basis of that resolution and the strong public support for our shareholding in the airport company, we decided to take up our share rights.

The debate in council followed similar lines as in the past. One point was reiterated more than any other– and this was the need for us to show confidence and support in the Auckland Airport Company – located in our back yard, employer of many of our people and generator of so much economic activity.

It was critical that we support the Auckland Airport Company as a corner keystone shareholder. Our share will join Auckland City ‘s, amounting to nearly 23 per cent as a primary shareholder in this key utility and strategic asset for our city and country.

The offer was at $1.65 per share, which was a discounted rate. The closing price on the day of announcement of the offer was $1.92. We made our decision on the basis that there was sufficient dividend income to meet the interest cost on borrowings required to take up the shares.

We have always appreciated the element of a strong upside in the airport with potential commercial growth at the airport as well as the opening in the not too distant future of the second runway. This will see a potential doubling of the 13.5 million people who come in and out of the airport every year to 25 to 30 million by 2020.

Enjoy your week.