The following is our media release published Tuesday 13th September 2022 relating to written confirmation we received from Christchurch Airport that they don’t need shareholder approval for projects up to half their current asset value.
Media Release – Tuesday 13th September 2022
Christchurch Airport confirms “no specific shareholder approval will be required” for international airport at Tarras
Christchurch Airport has confirmed to a concerned community group that it could proceed with the development of a new airport at Tarras, without shareholder approval. This was confirmed by Christchurch Airport project director Michael Singleton in a letter to community group Stop Central Otago Airport earlier this month.
The specific wording was: “Unless the project becomes a Major Transaction (under the Companies Act 1993) no specific shareholder approval will be required.” The letter also stated that the project “does not rely on ratepayer or taxpayer funding or support.”
SCOA spokesperson, Zella Downing, described the letter as alarming. “Christchurch Airport is owned 75% by Christchurch City Council, and 25% by central government. What Mr Singleton is indicating is that even a spend on Tarras of say $600 million would not require shareholder approval (based on current $1.3 billion asset value). That means that taxpayers and ratepayers will foot the bill of anything that goes wrong.”
It’s clear that the project is not without significant risks to the public. An analysis published in The Conversation just this week by a senior Victoria University academic found that Canterbury ratepayers “risk paying the price twice if the Tarras airport takes off.” Ilan Noy, Chair of Economics of Disasters and Climate Change at the university concluded:
The most likely scenario is that a Tarras airport will not be a profitable asset for many years, due to the high cost of development and operation. It would also divert domestic and international tourists, and lucrative freight, away from Christchurch, thus hitting the city’s ratepayers twice (losing money as the owners of Tarras, and losing business as the owners of Christchurch Airport).
Other industry executives and commentators have voiced major reservations about the project. They include the previous CEO of Christchurch Airport and former deputy chair of Air New Zealand.
Downing says that the group is alarmed by this new revelation from Christchurch Airport. “It smacks of arrogance and makes it clear that they are intent on growth, at any cost.”
She says that the executives driving the Tarras airport project today won’t be around if things go wrong. Nor will board members supporting it. “Malcolm Johns, the airport company’s CEO who came up with the idea in the first place, has just announced he is leaving in six months. By the time the project has the potential to start costing taxpayers and ratepayers, those executives and board members will most likely be long gone.”
Notes for media:
- The relevant section of the Companies Act is s.129. A “major transaction” is anything over 50% of the value of the company’s assets. Current financial statement here – current assets appear to be $1.3 billion.
- A full copy of the letter sent to Christchurch Airport is here. Response from Michael Singleton of Christchurch Airport is here. The relevant part is in the final three paragraphs of the letter.
- For further information, quotes or interview with Stop Central Otago Airport, please reply to this email. Please note that we are a volunteer, grass roots organisation, so sometimes cannot meet tight media deadlines. If we cannot do an interview, we can usually provide answers to questions via email.