Christchurch City Holding Limited chairperson Bryan Pearson. Photo: Supplied / CCHL
Christchurch City Council has appointed Bryan Pearson as the new chairperson of the company which manages its commercial assets.
Four independent directors, including chair Abby Foote, quit Christchurch City Holding Limited (CCHL) a fortnight ago over what they claimed was a broken relationship between the board and the council.
Pearson had almost three decades of experience in chief executive and board chairperson roles across the private and public sectors in Aotearoa and Australia.
"I'm committed to building trust and confidence between the Council and CCHL and to ensuring we are aligned and working well together in the city's best interests," he said.
Acting chairperson Gill Cox welcomed the appointment.
"CCHL congratulates Pearson on his appointment and welcomes him to the Board. With this key role now in place, CCHL is in a strong position to move forward in the direction set by Council to govern the city's major infrastructure assets."
Abby Foote was joined by fellow directors Chris Day, Martin Goldfinch and David Hunt in resigning from the board on 15 May.
Foote said the directors had lost confidence in the council.
CCHL managed more than $3 billion of assets on behalf of the council, including Lyttelton Port, Christchurch International Airport and Orion.
The council appointed Foote as chairperson in April last year, and she then assisted in appointing five other independent directors to sit alongside councillors Sara Templeton and Sam MacDonald.
Last year, CCHL's board sought the council's permission to actively manage its portfolio, buying and selling assets as it saw fit.
"Ultimately the Strategic Review highlighted multiple competing objectives and challenges: significant capital constraints at a time when subsidiary companies need capital for growth; $2.3 billion in group debt that is increasingly expensive to service and which is not being paid down as per the agreements of previous councils; the ever-present financial challenges facing council and its desire for higher dividends to offset rating pressure," Foote's resignation letter said.
"The CCHL recommendation to council was to allow CCHL to operate as an active portfolio manager to deliver against these competing objectives. Our recommendation would have lifted dividend flow to council by $450 million over the next 10-years and largely removed dividend volatility. It would have enabled debt to be paid down and for capital to be invested in the city's assets to ensure they were competitive, growing and resilient. Eighty-five per cent of the portfolio would have remained invested in infrastructure assets.
"It is important to stress that while politically convenient slogans around 'asset sales' came to mischaracterise the proposal, CCHL was committed to growing the value of the city's pool of assets."
The council rejected the proposal in December.
