AIA - Auckland International Airport

[Bongo666]

As the horse from Ren & Stimpy was fond of saying, "no sir, I don't line it, I don't like it at all"

Auckland Airport - Cairns and Mackay Airports

Auckland Airport agrees to purchase a stake in Cairns and Mackay Airports.

Media Release 11 January 2010

Auckland Airport agrees to purchase a stake in Cairns and Mackay
Airports

Auckland International Airport Limited (Auckland Airport) today announced it has agreed to purchase from Westpac Bank a 24.55% stake in North Queensland Airports (NQA), the operator of Cairns and Mackay airports in Queensland, Australia for A$132.8m (approximately NZ $166m).

Auckland Airport’s chairman, Tony Frankham, said, “This is a significant milestone for Auckland Airport and for our strategy to grow beyond our core business in Auckland.

This proposed acquisition opens up exciting new opportunities to strengthen and grow air services connections with Cairns as a stepping stone between New Zealand and the high-growth tourism markets of Asia, and enables us to leverage our world class
expertise in the large scale movement of people and goods to grow shareholder value.”

Cairns Airport is Australia’s seventh busiest airport, with approximately 3.7 million passengers in the year to 30 June 2009 (compared with Auckland Airport’s 13.0 million passengers in the same period). It is the closest international airport to Asia on
Australia’s eastern seaboard and is the gateway to Tropical North Queensland, an internationally renowned tourism region boasting two World Heritage listed attractions;

the Great Barrier Reef and the Wet Tropics Rainforests. Mackay Airport is an important regional domestic airport with nearly 1 million passengers in the year to 30 June 2009.

The airport is the main airport servicing the Bowen Basin, an important region for natural resources, which contains one of the largest deposits of coal in the world.

Mackay Airport also benefits from its close proximity to the Whitsunday resort islands.

Auckland Airport’s chief executive, Simon Moutter, said, “Since indicating in March 2009 that we would pursue opportunistic but carefully selected step-outs, we’ve looked at a range of opportunities to drive synergies and volume for our core business at Auckland. We also recognise that our most important value driver is growth in international passenger volumes. We believe that Asian tourism markets offer the greatest opportunity for volume growth and that one of the keys to growing Asian traffic is improved air services connections. Driving more travel demand out of Asia will be crucial to the future growth of both Auckland Airport and the New Zealand tourism sector.”

“New Zealand has underperformed against Australia in gaining a share of Asian tourism, so we have decided to take a position in the Australian market in an effort to get better connected and lift our market share. While our primary focus remains direct
Asian connections with Auckland, an important stepping-stone is to strengthen connections with other strategically located airports.”

“Cairns Airport fits the bill in terms of its location, scale, focus on Asian tourism, and market diversification opportunities. Mackay offers additional diversified exposure to
the booming Australian resources sector.”

“This is very much a case of the right deal at the right time. We’ve monitored this situation closely over the last year since privatisation by the Queensland Government, and we’ve now been able to take advantage of a rare opportunity to enter the
Australian airport market alongside key partners (Infrastructure Investment Fund, advised by JP Morgan Asset Management; and The Infrastructure Fund, managed by Hastings Funds Management, the largest airports funds manager in Australia).”

NQA Chairman, Jason Zibarras, welcomed Auckland Airport as a proposed new shareholder and said his Board of Directors was looking forward to forging a new alliance.

“As an airport operator investing in NQA, Auckland Airport will bring additional expertise. Their proposed investment is a welcome mark of confidence in the outlook for Cairns and Mackay,” Mr Zibarras said.

Mr Moutter said the Cairns/Mackay investment is relatively modest (around 5%) as a proportion of Auckland Airport’s total assets. “Auckland remains our core business. Our commitment to continuing to be one of the 10 best airports in the world and developing more air services to help grow New Zealand tourism and trade won’t be changing.”

Auckland Airport believes the proposed deal to be strongly value accretive, offering an equity return on investment in the mid teens percentages. It will initially be financed from existing debt facilities. Subsequently, the funding strategy is likely to involve a mixture of debt and equity consistent with Auckland Airport’s current capital structure.

The proposed purchase, which is due to settle on 13 January, is conditional on NQA obtaining the consent of its financiers to the proposed transaction prior to that date.

Auckland Airport would become the only airport operator shareholder in NQA. Its shareholding arrangements would enable it to exercise strategic and operational influence and drive benefits from joint air-services development and operational
expertise sharing across all three airports.

Mr Moutter added, “Cairns has been underperforming due to the decline in some key markets such as Japan. However we believe it is poised for a strong rebound, driven by improving tourism demand, recently announced new air services, new Federal
Government initiatives to encourage foreign airlines to fly to and beyond regional international airports such as Cairns, and more than A$45m of committed government tourism support.”

“We believe this is a good move for Auckland Airport and New Zealand and Auckland tourism”, said Mr Moutter.

Ends

For further information, please contact:

Richard Llewellyn
Senior communications manager
Auckland Airport
+64 (0) 9 255 9089
+64 (0) 27 477 6120

[Bongo666]

The reliance by AIA directors on budget airlines making their OZ purchase a winner by using their airport instead of others worries me.

This could hit AIA shareholders hard in years to come.

Directors must have been a little board over the hols

[Share Investor]

Auckland Airport Share Offer

Media Release 27 January 2010
Auckland International Airport Limited announces NZ$126.4
million pro rata entitlement offer

Auckland International Airport Limited (“Auckland Airport”) announced today its intention to raise NZ$126.4 million through a fully underwritten pro rata entitlement offer (“Offer”).
Eligible shareholders will be entitled to subscribe for 1 new share for every 16 shares held at 7.00pm (NZT) on the record date of 1 February 2010 (“Record Date”). The application price for the new shares is NZ$1.65 each.

The Offer is fully underwritten by Credit Suisse (Australia) Limited and First NZ Capital Securities Limited, the Joint Lead Managers.

A simplified disclosure prospectus for the Offer (“Prospectus”) has been registered with the Companies Office and is available free of charge on the company’s website http://www.aucklandairport.co.nz. Copies of the Prospectus will be dispatched to eligible shareholders on 2 February 2010.

As previously announced, on 13 January 2010 Auckland Airport acquired 24.55% of Cairns and Mackay airports in Queensland, Australia for A$132.8 million (approximately NZ$166.7 million)
(“Acquisition”). The Acquisition was financed from existing debt facilities and Auckland Airport will use the proceeds of the Offer to repay a portion of the debt drawn down to pay for the Acquisition.

Offer structure

The Offer is a pro rata entitlement offer, comprising four parts:

- The Institutional Entitlement Offer - the Joint Lead Managers will seek to approach all eligible institutional shareholders, who each may take up all, part or none of their entitlements by 2.00pm (New Zealand time) on 28 January 2010.

- The Institutional Bookbuild - new shares attributable to lapsed entitlements under the Institutional Entitlement Offer (including those attributable to ineligible institutional
shareholders) will be offered to institutional investors in an Institutional Bookbuild on 29 January 2010.

- The Retail Entitlement Offer - eligible retail shareholders will be sent a Prospectus together with a personalised entitlement and acceptance form and each may take up all, part or none of their entitlements by 7.00pm (New Zealand time) on 18 February 2010.

- The Retail Bookbuild - new shares attributable to lapsed entitlements under the Retail Entitlement Offer (including those attributable to ineligible retail shareholders) will be offered to institutional investors in a Retail Bookbuild on 22 February 2010.

Participation in the Institutional Entitlement Offer is limited to institutional shareholders in Auckland Airport who, as at 7.00 pm (NZT) on the Record Date, are Institutional Investors (as defined in the Prospectus) and are entitled to receive an offer as agreed by Auckland Airport and the Joint Lead Managers.

Shareholders are eligible to participate in the Retail Entitlement Offer if they are registered as an Auckland Airport shareholder at 7.00 pm (NZT) on the Record Date with a registered address in Australia and New Zealand and are not Institutional Investors (as defined in the Prospectus).

A notable feature is that the institutional component of the Offer is accelerated and occurs over the three days immediately following this announcement. Additionally, there is no rights trading.

Instead, entitlements not taken up or attributable to ineligible shareholders will be offered to institutional investors through bookbuilds run by the Joint Lead Managers. Any premium
achieved above the application price for the new shares in the bookbuilds will be returned (with no brokerage costs deducted) to those shareholders who do not take up their entitlements or
who are ineligible to do so.

The Offer structure is a first in terms of equity raisings in New Zealand, although this structure is well accepted and frequently used in Australia.

Auckland Airport considers that this Offer structure provides several benefits to shareholders.

These benefits include the following:

- Retail shareholders eligible to participate in the Offer will have the benefit of knowing the outcome of the Institutional Entitlement Offer and Institutional Bookbuild prior to deciding
whether or not to take up their entitlements.

- Shareholders will not be required to pay any brokerage or incur other transaction costs in order for their entitlements to be offered under the bookbuilds. Under a traditional rights issue, shareholders selling their entitlements would generally be required to pay brokerage.

- Shareholders who, for any reason, would be unable to sell their entitlement under a traditional rights issue may in this Offer still receive some value for their entitlement via any premium above the new share application price paid in the bookbuilds. Under a traditional rights issue, those shareholders would receive no value for their rights if they
were not sold during the rights trading period.

Auckland Airport’s chairman, Tony Frankham, commented: “The directors considered the accelerated renounceable entitlement offer structure is preferable to other alternatives such as a
traditional rights issue or private institutional placement.”
“It achieves an appropriate balance between our desire to give existing shareholders the best possible opportunity to participate or alternatively potentially obtain value from their entitlement, while at the same time achieving a streamlined and efficient equity raising that benefits the company and safeguards the broader interests of all shareholders.”

Strong capital structure maintained

On 12 January 2010, Auckland Airport announced that its credit rating and outlook are unaffected by the Acquisition.

Mr Frankham said, “The acquisition of a stake in the North Queensland airports is a significant milestone for Auckland Airport as part of our strategy to grow beyond our core business in Auckland and opens up exciting new opportunities to access higher growth international passenger markets. The Offer allows Auckland Airport to carry out the Acquisition and at the same time maintain its credit rating.”

“With our strong investment grade credit rating maintained, the directors of Auckland Airport believe the company is well placed to take advantage of the recovery from the global financial
crisis.”

Trading performance for the six months ended 31 December 2009
The Prospectus registered today includes financial information of Auckland Airport derived from unaudited management results for the six months ended 31 December 2009.

In the six months ended 31 December 2009, total passenger volumes rose 2.3 percent when compared to the previous corresponding period to 6,782,242, driven by increases on trans-
Tasman routes and growth in domestic travel passenger numbers due to strong competition.

Total aircraft movements are down 2.9 percent in the six months ended 31 December 2009 when compared to the previous corresponding period, which reflects the decreased frequency
of aircraft movements on domestic routes offset by increased frequency of aircraft movements on international routes.

Total revenue decreased 0.6 percent to NZ$182.9 million in the six months ended 31 December 2009 when compared to the previous corresponding period. The decrease was largely as a result of a reduction in retail revenue, impacted from the reversion to a dual operator model for the duty free business as requested by the Commerce Commission and the disruption caused by the construction work in the departures area. Aeronautical revenue in the six months ended 31 December 2009 remained consistent with the previous corresponding period.

Operating earnings before interest, taxation, depreciation and amortisation, and before accounting changes in the fair value of investment properties (“Operating EBITDA”) of NZ$138.8 million were achieved in the six months ended 31 December 2009, consistent with the Operating EBITDA of NZ$138.7 million achieved in the six months ended 31 December 2008. This flat Operating EBITDA result was primarily caused by decreased retail revenues being offset by lower operating costs than during the previous corresponding period.

Auckland Airport is due to report its operating and financial results for the six months ended 31 December 2009 at the end of February 2010.

Key dates *
Institutional Entitlement Offer

Trading halt commenced and Institutional Entitlement Offer
opens: 27 January 2010

Institutional Entitlement Offer opens: 28 January 2010

Institutional Bookbuild: 29 January 2010

Record Date for determining entitlements: 7.00pm (NZT), 1 February 2010

Trading halt lifted: Open of trading on the NZSX and ASX on 2 February 2010

Settlement of Institutional Entitlement Offer and Institutional
Bookbuild: 4 February 2010

New Shares allotted pursuant to Institutional Entitlement
Offer and Institutional Bookbuild expected to commence
trading on the NZSX and ASX: 4 February 2010 on the NZSX / 5 February 2010 on ASX

Retail Entitlement Offer

Record Date: 7.00pm (NZT), 1 February 2010

Expected despatch of Prospectus and entitlement and acceptance forms: By 2 February 2010

Retail Entitlement Offer opens: 2 February 2010

Retail Entitlement Offer closes: 18 February 2010

Retail Bookbuild: 22 February 2010

Settlement of Retail Entitlement Offer and Retail Bookbuild: 25 February 2010

New Shares allotted pursuant to Retail Entitlement Offer and Retail Bookbuild expected to commence trading on the NZSX and ASX: 25 February 2010 on the NZSX / 26 February 2010 on ASX

* Dates may be subject to change.

Note on shares lending: In the event that a shareholder has existing shares out on loan at the Record Date, the borrower will be regarded as the shareholder for the purposes of determining the entitlement (provided that those borrowed shares have not been on-sold).

For further information, please contact:

Richard Llewellyn
Senior Communications Manager
Auckland Airport
+64 (0) 9 255 9089
+64 (0) 27 477 6120

[Bongo666]

I am going to take up my full allocation in the capital raising. Anyone else think this is a good deal?

[kbot]

I am going to take up my full allocation in the capital raising. Anyone else think this is a good deal?

When someone is giving you free money snatch it.
What sold me on this was the "no brokerage fee" aspect of this transaction.
With the world cup around the corner, and revamped motorway, quite possibly the best time to slip AIA share is at the peak of the sports event. I am using a layman's stab at this, but will research the Vancouver winter and South Africa soccer games' impact on their stock market.

[Bongo666]

I am going to take up my full allocation in the capital raising. Anyone else think this is a good deal?

When someone is giving you free money snatch it.
What sold me on this was the "no brokerage fee" aspect of this transaction.
With the world cup around the corner, and revamped motorway, quite possibly the best time to slip AIA share is at the peak of the sports event. I am using a layman's stab at this, but will research the Vancouver winter and South Africa soccer games' impact on their stock market.

Buy on any weakness Kbot. It is a good one under 2 bucks...

[kbot]

...lol. My gut feeling on this one is it worth slightly above $1.85 at current market price given it's risk/return level. Ofcourse in a few years I'll probably be kicking myself for not taking more these, but my portfolio is totally overcooked with AIA. The last few months I have seriously been absorbing the reaction of the market to any news on AIA, and true to form, the market is not rational . . .

[Bongo666]

...lol. My gut feeling on this one is it worth slightly above $1.85 at current market price given it's risk/return level. Ofcourse in a few years I'll probably be kicking myself for not taking more these, but my portfolio is totally overcooked with AIA. The last few months I have seriously been absorbing the reaction of the market to any news on AIA, and true to form, the market is not rational . . .

Nothing wrong with taking a bigger stake in a good company Kbot. It is one company that hasn't really taken off big time during the recent "recovery" share price wise so looks to be reasonable value given its yearish lows of just below $1.60.

[kbot]

Still not sure about the AIA's stake in Queenstown recently. I suppose the share price isn't heading south, maybe due to this, so that is positive. As tourism has always been for New Zealand a sure thing, I don't think I will be re-adjusting my portfolio just yet, unless we get a good run.

[Bongo666]

Still not sure about the AIA's stake in Queenstown recently. I suppose the share price isn't heading south, maybe due to this, so that is positive. As tourism has always been for New Zealand a sure thing, I don't think I will be re-adjusting my portfolio just yet, unless we get a good run.

I think they overpaid http://shareinvestornz.blogspot.com/201 ... -good.html for the Airport considering they will be losing nearly $1 million per annum on the deal.

Long term it is a great move but there will be only downside for the medium term Kman.