Bay of Plenty Regional Council is considering selling some of its stake in the profitable Port of Tauranga.

The regional council holds a 54.1 per cent shareholding in the port, through its subsidiary Quayside Holdings Limited, and is looking to sell its shareholding down to 28 per cent.

Council's current shareholding is $2.045 billion as at close of trading, December 8.

Since 2012 the dividends have been used to reduce the region’s rates bills.

The Port of Tauranga is considered an important strategic asset for the Bay of Plenty because it provides employment and economic activity.

Regional council Chair Doug Leeder in a statement said: “Diversification of investments is a key tool to reduce the riskiness of returns and is regarded as best practice for good financial portfolio management.

“The current large concentration of investment in the Port shareholding presents risks which could be reduced through having a more diversified portfolio.”

The plans to sell down the council’s shares in the port are part of its draft 2024-2034 long-term plan (LTP).

The LTP provided analysis from financial advisors Cameron Partners that said a sell down of the port shares would strengthen Quayside Holding’s ability to grow a responsible and diversified fund that generated long-term returns for the region.

Regional council Chair Doug Leeder said the council would remain a significant shareholder if it sold down to 28 per cent. Photo: John Borren/SunLive.

At a meeting on Thursday, the council adopted the plan for audit before it goes out for public consultation early next year.

Leeder said the decision was another step towards consulting with ratepayers and seeking feedback on whether the council should conduct a staged sell down of the shareholding.

“We’re at the very beginning of a process and no decision has been made by council or Quayside Holdings in relation to staged sell downs.

“Consultation on the long-term plan is a vital part of this decision making process, and there will be plenty of opportunity for people to have their say,” said Leeder.

“The port is a key regional asset and we [the council] would remain a significant and strategic shareholder in it through retaining a minimum floor shareholding of 28 per cent.”

The council wanted to ensure it was optimising Quayside’s investment portfolio and the dividends it returned to the council and community, he said.

“Ultimately, the careful and sensible financial management of council has a flow on effect to every household and resident in our region."

Bay of Plenty Regional Council rates are subsidised by dividends from the Port of Tauranga. Photo: John Borren/SunLive.

“It’s critical we continue to deliver our important work and keep rates affordable.”

In the 2023/24 year, the regional council received a dividend of $45 million from Quayside which made up 24.4 per cent of its annual revenue.

Leeder said this helped to reduce rates by an average of $380 per household and enabled better outcomes for the environment.

Any proceeds from the sale would be invested to benefit current and future Bay of Plenty ratepayers, and some might also be used to pay back $200 million that the Regional Council has used to pay for regional infrastructure, Leeder said.

The council also discussed the potential of establishing a new Regional Infrastructure Fund, managed by Quayside, to invest in regional infrastructure projects.

The LTP consultation process will take place in early 2024, with a decision on the final plan to be made in June.

As part of the LTP consultation, the council will also consult on public transport funding and regional parks.

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