The Waitaki District Council voted unanimously yesterday to proceed with a new investment loan of $4.3 million to the North Otago Irrigation Company, raising the total amount being lent to the company to a maximum of $17m.
A full public gallery was present to hear last minute statements of support and opposition from members of the public and to listen to debate on the terms of the loan.
Additional support for the loan was announced yesterday from NOIC’s primary lender ASB Bank manager, Ray Parker, who said the bank would allow council’s security agreement to rank alongside and not behind ASB’s own agreement.
Mr Parker spoke in support of NOIC and their proposed development and outlined the reasons why councillors should support the loan.
He said ASB had chosen not to be involved with other irrigation schemes.
“But in this case, four major banks all submitted term sheets which shows the banking sector is confident in what NOIC are doing.”
Robyn Wells, chief executive NOIC, said the proposed new loan and its terms will not come into effect unless the company raises $14m from new share sales which will be offered through a prospectus later in the year.
Other key conditions include an extension of the total loan term to June 30, 2022, the interest rate is based on the published one year swap rate plus a 1.25 margin, the interest rate will be set on May 31 each year and will apply to the following year, and interest will be paid quarterly.
An amendment moved by Cr Hugh Perkins, who was not happy with the terms of the loan, was included in the list of recommendations and carried. It stated that NOIC will advise council when all the shares in stage two have been sold (if this occurs before the maturity date) which will trigger a renegotiation between the two parties to consider and vary the terms of the loan agreement. The amendment stated that this would reflect council’s requirement to achieve a full commercial return on their investment and provide for the eventual repayment of the loan.
Opponents to the loan have been asking for a decision to be deferred until more information could be made public and this was reiterated by Oamaru resident, Ron Sim, during yesterday’s public forum.
“Lets stop and back off and have a more meaningful decision-making process,” he said.
Ex-councillor, Helen Stead, who has also publicly opposed the loan said she would like to review the information presented at the meeting before commenting.
By LINDA MCCARTHY