Submission
Which option do you prefer?
Option One – Council's preferred option – Sale of Aurora Energy
Further comment
See attached document for more detail
I support the sale, IF the sale price is sufficient to provide a capital fund of $100’s of millions, as proposed.
However, I find it hard to believe that private equity entities will compete to purchase an asset that has little prospect of generating a genuine return on capital in the short and medium term.
But I also understand there is a lot of information that has been withheld for commercial reasons.
I have two submission points
o The sale price should exceed
o the NPV of projected future dividends, as modelled by qualified analysists
o the NPV of a fund generating a return 4% greater than inflation on the net sale price, after clearing all debt.
o The council places both the resulting fund, and the Waipori fund, in a protected trust that can not be raided by future councils when faced with ongoing significant capital expenditure to replace and maintain critical assets.
The trust deed should only allow the capital base to be drawn down if there is an extraordinary catastrophic event. An example would be a rupture of the Akatore fault, or the Alpine fault, causing massive infrastructure damage that threatens the survival of the city as a functioning entity.
Basically, I don’t trust future elected councils to show the same restraint in protecting the capital base of the investment as has been the case to date
Supporting information
Submitter
Submission id number: 1045726
Submitter name:
Colin Brown
Organisation