Will the Bank of China need to rescue Queenstown airport’s debt? [Crux, 07/07/20]
The question as to the source of cash for the Queenstown Airport Corporation’s purchase of Lot 6 remains a mystery.
The land near the main runway changed hands legally last November following a ten year court battle but QAC is yet to pay for it. They forced the purchase using the Public Works Act to support future airport expansion.
However, not only is the land now arguably not needed, the airport corporation does not have the money to fund the purchase, according to their published accounts.
The land belonged to Remarkables Park Ltd and developer Alastair Porter has, so far, been patient about getting his money. The value of the land is set relative to other similar land sales as at November 2019. At that level, even at the lower end of the scale, the total is well over $100 million. It could be as high as $200 million if Porter drives a hard bargain.
Published accounts from the QAC show a small amount of cash (around $1 million), around $70 million existing debt and a borrowing limit of $140 million. That means that there is not much more than $70 million available, not taking any Covid-19 nose dive in airport income into account.
For the past month Crux has been asking QAC, Auckland Airport (25% shareholder), QLDC (75% shareholder) and the Auditor General’s office – Where Is the Money?
QAC will only say that the amount is “budgeted for” without releasing any further detail or explanation.
Crux asked Auckland International Airport Ltd if they had any plans to bail out Queenstown Airport either with a loan or via the sale of shares. The sale of shares could see the local ratepayers lose majority control of the airport.