QHLHA - Quayside Holdings Pref Shares

[Grimy]

Thanks for posting LM

[Lego_Man]

Thanks for posting LM

No problem - this is also quite an interesting page:

https://www.participate.boprc.govt.nz/long-term-plan-2024-2034/whether-sell-some-port-tauranga-shares

From the PWC report:

PPS is now a relatively expensive source of financing - repayment would
save $9m p.a. in interest costs (net of tax imputation credits)

Another factor that is limiting QHL’s capacity to fund a higher distribution to Council is the costs associated with
the PPS. These have grown significantly following the recent tri-annual base rate reset. The Financial Model
assumes that the PPS after tax benefits are now greater than POT generates in returns (6.6% PPS cost vs 3%
dividend + 3% capital growth).

Repaying the PPS (which is required if QHL reduces its POT shareholding below 50.1%), is expected to deliver
a material interest cost saving to QHL. Based on the Financial Model assumptions, an additional ~$9 m p.a. of
free cash flow is generated (post the adjustment for the PPS tax imputation credits), which is equivalent to 17%
and 10% of POT’s forecast dividend to QHL in FY24 and FY36, respectively.