Airport seeking recapitalisation as economic curveball of Covid-19 bites

Local News

The economic impact of Covid-19 has struck regional airports across New Zealand and New Plymouth’s independent airport company, Papa Rererangi i Puketapu Ltd (PRIP), is asking its owner, the New Plymouth District Council (NPDC), for a $19-25 million debt for equity swap.

On Tuesday (30 June 2020) the Mayor and Councillors are likely to give the green light to their $175 million Get Us Back On Our Feet yearly budget after receiving close to 1,000 pieces of public feedback. Approximately $20 million has been set aside to help struggling businesses and residents recover from Covid-19 in this Annual Plan and they will also consider the recapitalisation of PRIP after approving additional debt funding of $1.9 million to carry the company through until the end of July 2020.

NPDC’s Chief Operating Officer and Shareholder representative Kelvin Wright says the timing is unfortunate as the new Puketapu hapu designed airport had just opened in March when the global pandemic struck which has been devastating.

“New Plymouth Airport is an important strategic asset and a vital economic gateway to Taranaki which has been economically decimated by Covid-19. Almost all air travel was suspended during lockdown and at Alert Level 3, effectively cutting revenue at the airport to zero which is a major headache for all regional airports across New Zealand.  Independent financial advisors PWC have investigated the options and recommend a major recapitalisation as soon as possible of between $19-25 million so the airport can secure its financial future and recover to pre-Covid revenue by about 2023,” says Mr Wright.

The report says a partial share dividend to help pay back the money is on the cards and the Council has a Covid Recovery Reserve that could be used to minimise the impact on rates. The other option explored in the paper is to return the airport to owner NPDC, who would operate and fund it.

For more information see here.