Port of Tauranga plans capital return

The company says the money will be returned on a pro rata basis of $7 per share and in the process will cancel one in every eight shares held.

Chairman, Fraser McKenzie, says the reduction will optimise the financial structure of the company and maximise the return on funds employed in the business.

"After careful analysis the directors had decided that returning surplus capital now was in the best interests of all shareholders and would allow the company to improve its return on shareholder's equity for the future."

Mr McKenzie says the company's dividend distribution policy will remain the same after the capital reduction.

The return of capital is subject to receiving a favourable binding ruling from the Inland Revenue Department confirming that it will be tax free, and High Court approval of the arrangement.

Following the transaction POT will have around 67 million shares on issue.

Infrastructure investment company Infratil (NZSE: IFT) is one of the port's main shareholders, with just under a 20% stake in the company.

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