Ah, another 'squeak' from our on-line democracy channel!
Brian, I was present at a large, listed company AGM earlier this year. The
company had been privatised and publicly listed - way back about you know
when - and over the years it went belly-up. At the time the company was
belly-up I believed it should have been sold to a larger, off-shore company.
Instead, the Government purchased it. The company was then re-listed and the
good old NZ public (amongst others) bought up 49% of the company - and the
Government held on to 51%.
The company put together a good board of directors, made use of the extra
capital and finance available and started virtually all over again. I had
little to do with the company or its products - until one day when I was in
a spot of bother. The company employee pulled out all stops including
missing his lunch break and solved my problem. As a reward, I purchased 500
shares in the company and wrote to the CEO praising the service, the
employee and castigating the other competing company that caused my bother.
The shares were pretty cheap, about what I was spending for the service I
required.
Anyway, when I attended the AGM I was speaking with the Chairman and we
discussed in very general terms the reasons for the sudden buy-out of shares
in the Lyttelton Port Company by the CCC agency CCHL. The CEO thought that a
Council taking over a trading company was going to ask for trouble. The
Council would be responsible for Board content and decision-making. The
Council in other words would interfere with the objectives of the company.
He cited the example of Port of Tauranga and Port of Auckland, and for that
matter, North Ports which were both city-council-controlled. Tauranga is
very profitable and doing well, the other two ports are doing poorly.
Tauranga is a publicly-listed port. The others aren't.
The CCC should sell down all its trading assets taking a majority stake of
51%. Moreover, the CCC should sell the shares on the open market thereby
getting a spread of owners including (hopefully) CCC 'Mum and Dad'
ratepayers. What is should NOT do is sell say 25% to a single entity.
Why? Shares on the open market attract the maximum value or price per share.
Selling to a 'white knight' or a private placement of shares means they are
gifted at a discount price. Furthermore, the new partial owner will have its
own agenda which may not be for the good of the customers or the CCC. (for
example, selling out and taking a huge capital gain when the company has
been turned around). By contrast, publicly-listed shares mean ALL
shareholders are treated equally, that is, no one share-holding organisation
can be given information not available to all shareholders. That effectively
means day-by-day interference by the CCC or its lackey organisation CCHL,
would be effectively neutralised. More to the point, if the organisation
does well, so too do the shareholders - and all get good dividends. The
dividends (if any, not all companies can afford to pay dividends for various
reasons) then go back to the shareholders. Now, if the CCC owned the entire
company (along with its white knight shareholder) it can choose to pay a
dividend whether or not the company can afford it, which may help CCC
balance its books, but won't help the long term health of the company. And
that is the problem!
OK, so our poor Christchurch 'Mum and Dad's' are sooo darn poor they could
not possibly buy shares issued by the CCC. Well, they can; cut back 4
expensive lattes per week and they'd have enough for 100 shares in about 10
weeks (if shares were issued at about $1.80 per share). If BOTH 'Mum and
Dad' cut back their lattes they would be able to buy 200 shares between them
in 10 weeks.... A bit of a struggle, sure, but wait! think of the
dividends!!! Yep, Mum and Dad have invested in a few hundred shares in
'their' company and stand to get dividends into the future - as will their
dear CCC. And, if the company does well, they get to keep the capital gains
that can be handed on to their children.... Just as the CCC wold, if the
company is viable.
By the way, 13% of rates budget for "libraries and learning" is one Hell of
a big chunk. I see the CCC is looking vaguely at a 'shared ownership' of the
re-built Central Library. Oh! Come on!!
Tim Kerr
Rest of post
--------------------------------------------------
From: "David Lloyd" <<email obscured>>
Sent: Saturday, December 06, 2014 9:08 AM
To: <canterburyissues@forums.e-democracy.org>
Subject: Re: [Canterbury Issues] CCC cost planning
> Good morning Comrade
>
>
>> On 6/12/2014, at 1:17 am, Brian Sandle <<email obscured>> wrote:
>>
>> No-one is discussing my point about how the City shall make up for the
>> reduced income if it sells some ownership of its earning assets.
>
> Probably no one is discussing it with you because you do not discuss.
>
>> I am suspicious this financial strife is stage-managed to further a TPPA
>> agenda
>> in which democratic participation is seized from us and replaced by
>> corporate control.
>
> You seem to be saying that the TPPA is responsible for the earthquakes? I
> can’t figure that out; the cities financial woes and the TPPA are not
> linked. The earthquakes are the reason the city is in financial strife –
> under insurance, neglected infrastructure and repairs taking longer than
> expected and therefore more costlier are some of the reasons that asset
> sales are necessary.
>
> Many ratepayers are struggling to pay rates now. If rates continue to rise
> unabated, as you are suggest, many citizens will have no choice but to
> sell. Many will leave the city and that will mean fewer ratepayers so the
> council will have to raise rates to cover the shortfall.
>
> david
> David Lloyd
> Beckenham, Christchurch
> About/contact David Lloyd: http://forums.e-democracy.org/p/davidlloyd
>
> View full topic:
> http://forums.e-democracy.org/r/topic/5f0a2oc2FpXlBgQZGcsN80
>
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