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Napier Port seeks to raise $204.3m to $234.0m with IPO

MEDIA RELEASE: NAPIER PORT
15 July 2019

Port lodges Product Disclosure Statement with indicative price range of $2.27 to $2.60 per share; priority offer to open on 23 July 2019; bookbuild to open 6 August 2019[1].

Napier Port today announced it is seeking to raise $204.3 million to $234.0 million with its initial public offer (IPO) of a 45% stake in the company. It has also set an indicative price range of $2.27 to $2.60 per share for the offer.

The indicative price range, which implies an enterprise valuation[2] of $431.6 million to $497.6 million, is included in the Product Disclosure Statement (PDS), which was lodged earlier today with the Registrar of Financial Service Providers. The PDS and other useful information is available at www.napierportshareoffer.co.nz or www.business.govt.nz/disclose, offer number (OFR12679).

The final price will be set by Napier Port following a bookbuild managed by the Joint Lead Managers Deutsche Craigs and Goldman Sachs, expected to take place from 6 August to 7 August 2019. All shares will be issued at the final price.

Napier Port Chair Alasdair MacLeod says: “We are delighted to invite investment in our company. Today – after several months of hard work preparing for the IPO – we are now in a position to give others the opportunity to invest in our future.

“For nearly 150 years, Napier Port has been connecting Hawke’s Bay and the surrounding regions with the people and markets of the world. The combination of the robust Hawke’s Bay economy, our position in the country’s major transport routes and our experienced management team, have underpinned the Port’s stable financial performance in recent years and give directors confidence in the future of the Port.”

Napier Port is offering 90 million shares in the IPO. Of the capital raised, $110.2 million will be used to repay the Port’s existing debt and provide capacity for the Port to fund a long-term investment programme, which includes the construction of a new multi-purpose wharf, 6 Wharf.

The remainder of the capital raised in the IPO will enable the Port’s current owner, Hawke’s Bay Regional Council, to realise a portion of its investment in the Port and will also provide funding for interest-free limited recourse loans to Eligible Employees to buy shares in the Port and meet the costs associated with the IPO.

A priority offer to Hawke’s Bay residents and non-resident ratepayers, eligible Port employees and certain iwi entities[3] is due to open on 23 July 2019 and close on 5 August 2019, with the institutional and broker-firm offer and bookbuild following that. The IPO is expected to complete with a listing on the NZX on 20 August 2019. As there is no public pool of shares available in the Offer, members of the public that do not meet the priority criteria are encouraged to contact their broker.

Chief Executive Todd Dawson says: “Napier Port is a long-term infrastructure asset. It enjoys supportive regional economic growth drivers, a diversified trade portfolio, and strong relationships with its customers, people and community. Over the last decade the Port has also established a record of stable growth.

“We therefore need to invest to ease the congestion already impinging on Port operations, to continue to support our customers, and to host the larger container and cruise ships that are increasingly visiting New Zealand waters.

“The centre piece of our planned investment is the new multi-purpose 6-Wharf, a new 350-metre wharf on the north side of the current container terminal. The new wharf will enable us to capitalise on future growth opportunities. It will provide for berthing of larger container vessels and increased operational agility and resilience.

“The IPO is essential to funding this investment programme. Napier Port is excited to be embarking on the next phase of its history and we welcome new investors in the Port that share our aspirations.”

In the PDS Napier Port forecasts[4] revenue in the 12 months to 30 September 2019 to grow 6.1% to $97.4 million from $91.7 million in the 2018 financial year. It also forecasts a 6.8% increase in pro-forma EBITDA[5] to $39.7 million over the same period from $37.2 million in the prior financial year.

In the 2020 financial year the Port forecasts revenue to rise 5.3% on the 2019 result to $102.5 million and Pro forma EBITDA to rise 3.1% over the same period to $40.9 million.

The key drivers of these forecasts are detailed in the PDS and include, among other things, container and bulk cargo volumes, log volumes, cruise ship visits and pricing measures designed to recover investments in Port infrastructure and increases in operating costs.

Mr MacLeod says the Port is pleased with the level of interest it received in the pre-registration process from Hawke’s Bay locals and ratepayers.

“If this level of interest carries through to the offer, we can be confident of meeting Hawke’s Bay Regional Council’s objective of strong local participation in the IPO. We are looking forward to formally opening the priority offer later this month,” Mr MacLeod says.

The Port is holding briefings with potential shareholders on the IPO tomorrow, including eligible iwi entities and the business community.  A community meeting will be held at MTG’s Century Theatre at 3pm on Tuesday 16 July.

“We are encouraging all people considering an investment in the Port to read carefully the PDS we have lodged today. The PDS, along with other information, is available at www.napierportshareoffer.co.nz,” Mr MacLeod says. “The PDS contains important information about Napier Port, its outlook and the details of the offer. It also identifies risks to Napier Port’s business and plans.

“We also encourage people to seek independent financial advice to ensure any investment in the Port is aligned with their personal financial objectives.”

 

[1] All dates mentioned in this release are indicative only and are subject to change.

[2] Napier Port’s enterprise value is the value of the company’s equity less the cash it holds on its balance sheet at the completion of the offer.

[3] Iwi entities eligible to participate in the offer include Ngāti Kahungunu Iwi Incorporated, the four Taiwhenua of Ngāti Kahungunu Iwi Incorporated and each tangata whenua appointer as defined in the Hawke’s Bay Regional Planning Committee Act 2015.

[4] The forecasts detailed in this release should be read in conjunction with the PDS and in particular: Section 7 Napier Port’s financial information, which details the definitions of the financial metrics, the basis of their preparation and the assumptions underlying the forecasts. Historical financial information for FY2018 relates to Port of Napier Limited as Napier Port Holdings was incorporated only shortly before lodgement of the PDS and has not conducted any business prior to acquiring Port of Napier.

[5] Pro forma EBITDA is a non-NZ GAAP measure that includes Pro forma adjustments as described in PDS Section 7.9 (Reconciliation of Pro Forma EBITDA to Statutory NPAT).

Offer timetable

Priority Offer opens 23 July 2019
Priority Offer closes 5 August 2019
Institutional Offer and Bookbuild 6 August – 7 August 2019
Final Price announced and allocation 7 August 2019
Broker Firm Offer opens 8 August 2019
Broker Firm Offer closes 16 August 2019
Settlement and allotment 19 August 2019
Listing, expected commencement of trading on the
NZX Main Board
20 August 2019

About Napier Port

Napier Port is New Zealand’s fourth largest port by container volume. We are the main gateway for Hawke’s Bay exports and operate a long-term regional infrastructure asset that supports the regional economy. Our strategic purpose is to collaborate with the people and organisations that have a stake in helping our region grow.

For more information

Erin Harford-Wright
Senior Communications Advisor

Phone: (06) 833 4643
Email: erinh@napierport.co.nz

Important Notice

Napier Port Holdings Limited (Napier Port) is the issuer of the shares to be issued under the offer to which this media release relates.  A product disclosure statement for the offer, which sets out the terms and conditions of the offer, is available, and can be obtained from www.business.govt.nz/disclose, offer number (OFR12679) or calling 0800 041 042. Nothing in this media release constitutes an invitation to subscribe for, or an offer of, shares, securities or financial products to any person, in any country in which it would be unlawful to do so.

Application has been made to NZX Limited (NZX) for permission to list Napier Port and to quote its shares on the NZX Main Board. However, NZX accepts no responsibility for any statement in this media release. The NZX Main Board is a licensed market operated by NZX, which is a licensed market operator, regulated under the Financial Markets Conduct Act 2013.

Napier Port, its shareholder, the Joint Lead Managers, the Co-Manager, their respective affiliates and advisers, and each of their respective directors, shareholders, employees and representatives make no representation, warranty or undertaking, express or implied, as to the fairness, accuracy, reliability or completeness of, and to the maximum extent permitted by law hereby disclaim and shall have no liability for any loss arising from, this media release. This media release is not intended for release outside of New Zealand.

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