Note 35: Subsequent Events
The following policy decisions and events occurred after 30 June 2012 and prior to the financial statements being signed. No adjustments have been made to these financial statements. The nature and estimated financial commitment (where known) is noted below.
Canterbury Earthquakes
Christchurch Central Recovery Plan
On 30 July 2012, the Christchurch Central Recovery Plan was approved by Cabinet and publicly launched. The Plan defines the form of the central city, identifies the locations of the key anchor projects needed to boost the recovery, and outlines block plans showing what the central city could look like in the future.
The Crown has signalled that it will commit financial resources to land acquisition and to the development of certain anchor projects.
Zoning decision - Port Hills
On 17 August, a zoning decision was announced which resulted in the Crown committing to purchase 121 residential properties at risk of rock roll in the Port Hills. The estimated financial impact of this commitment to purchase properties is $66 million.
On 10 September, a zoning decision was announced which resulted in the Crown committing to purchase 37 residential properties at risk of rock roll in the Horotane Valley and adjacent to the Bridle Path Road in the Port Hills. The estimated financial impact of this commitment to purchase properties is $19 million.
The Crown is likely to receive insurance receivables relating to the purchased properties pursuant to the 17 August and 10 September decisions, but the exact quantum of these receivables is yet to be confirmed and is dependent on the settlement option selected and individual insurance policies.
There is a working agreement between the Crown and the Council that all costs associated with rock roll in relation to zoning announcements on 29 June, 17 August and 10 September will be shared. There are a number of parameters to consider, and the proportion of each party's contribution has not yet been agreed to. Hence the residential red zone property provision as at 30 June 2012 includes the full value of settlement proceeds to be paid to property owners.
Zoning decision - Zoning reviews
On 24 August, and as a result of a zoning review, 3 properties changed from Red to Green Zone, and 101 properties changed from Green to Red Zone. The estimated financial impact of this commitment to purchase properties is $17 million. In addition, the Crown is likely to receive insurance receivables relating to the purchased properties, but the exact quantum of these receivables is yet to be confirmed and is dependent on the settlement option selected and individual insurance policies.
Zoning decision - Legal fees for Rapaki Bay freeholding
On 21 August, two properties that were zoned red in Rapaki Bay, Lyttleton were not general freehold titles. The Crown will contribute to the vendors' legal fees to transfer the property to general freehold.
Zoning decision-- Leased, Vacant, Uninsured and Commercial/Industrial Properties
On 3 September, a zoning decision was announced which resulted in the Crown committing to purchase 163 leased, vacant, uninsured and commercial/industrial properties in the red zone. The estimated financial impact of this commitment to purchase properties is $14 million. In addition, the Crown is likely to receive insurance receivables relating to the leased and commercial properties, but the exact quantum of these receivables is yet to be confirmed and is dependent on the settlement option selected and individual insurance policies.
Solid Energy
Subsequent to balance date Solid Energy undertook a comprehensive review in response to extremely challenging market conditions across the business and difficult underground mine development conditions due to complex geology.
As a result of that review, Solid Energy announced changes to the structure and capability and size of the organisation resulting in a number of their assets being impaired in these financial statements. Further costs relating to the restructure will be recognised in the following financial year but are not likely to be material to the Crown.
Meridian Energy
Meridian Energy Limited has been approached by Pacific Aluminium Pty Ltd, a business unit of Rio Tinto Ltd, the majority shareholder of New Zealand Aluminium Smelters Ltd (NZAS), to discuss potential changes to the electricity contract with the smelter. In 2007 Meridian renegotiated the contract conditions with NZAS and signed a new supply agreement, which takes effect in January 2013. Discussions are ongoing and remain confidential. The outcome of negotiations is unknown at this stage.
