RPT-Auckland Airport defers terminal expansion decision

WELLINGTON, April 3 (Reuters) - New Zealand's main international gateway and takeover target Auckland International Airport Ltd (AIA.NZ: Quote, Profile, Research) said on Thursday it would postpone a planned expansion of its international arrivals terminal.

The airport, which is awaiting government approval for a NZ$1.8 billion ($1.4 billion) partial takeover bid by a Canadian state pension fund, said it would defer a decision on the NZ$200 million project for a year.

"This period will give us time to see how the existing facilities perform and to better gauge the optimal timing for the next stage of the arrivals expansion," chief executive Don Huse said in a statement.

Other factors, including the impact of the global credit crunch on passenger numbers, also influenced the decision, he added.

Shares in Auckland Airport, a top-10 company which handles 70 percent of New Zealand's international traffic, closed down 2.2 percent at NZ$2.28 in a wider market up 1 percent.

The New Zealand government is expected to make a decision by the end of next week on whether to approve the Canada Pension Plan Investment Board's successful bid for 40 percent of the airport at NZ$3.5980 a share.

Analysts expect the government to block the deal, after it announced mid-way through the bid it would toughen the criteria for investment in strategic assets such as Auckland Airport.

If CPPIB's bid is cleared, the group has said it will put forward a capital restructuring proposal to shareholders, which includes boosting the airport's debt levels.

The terminal expansion project had previously been brought forward to handle the large number of overseas visitors expected for the 2011 Rugby World Cup in New Zealand.

Huse said regardless of the decision on the project, the airport would be able to handle the expected influx of rugby fans in 2011. (NZ$1=$1.27) (Reporting by Adrian Bathgate)