22 Feb 2012

Marsden Point upgrade sparks interest from banks

7:32 am on 22 February 2012

Refining NZ says banks have already expressed interest in funding the planned $400 million upgrade of its Marsden Point petrol refinery.

The country's only refinery made $34.4 million in 2011, compared with $57.6 million in 2010, as the high New Zealand dollar cut into its bottom line.

Refining NZ's board on Tuesday announced it is supporting a $400 million upgrade of the aging petrol plant at Marsden Point.

This will boost production by two million barrels a year and lift its market share from 50 to 65%.

Refining NZ chief executive Ken Rivers says even though the refining sector remains volatile the upgrade is a long-term investment.

The upgrade will need to be approved by shareholders at Refining NZ's annual meeting in April, but Mr Rivers says they won't be required to put up any more money.

"This project is very profitable, highly affordable and very bankable.

"We've had a number of significant banks in New Zealand and overseas looking for this business to secure it through bank loans, which we will be doing."

Meanwhile, Mr Rivers has announced he will be returning to the UK later this year. The board expects to appoint a replacement in the next six months.

Shares in Refining NZ rose 1 cent to $2.89 on Tuesday.