DOLLAR LOAN TO NEW ZEALAND

Press, Volume XC, Issue 27274, 15 February 1954, Page 9

DOLLAR LOAN TO NEW ZEALAND

Finance For Pulp And Paper Project

WASHINGTON, February IX The Export-Import Bank. today announced that it had authorised a loan of 16,000,000 dollars to the New Zealand 'Government.

The loan would assist in the purchase of United States

equipment, and services for the Government’s Murupara project for tha production of timber, chemical pulp, and newsprint, said a bank spokesman. He said that it had been the desire of New Zealand officials and businessmen to place orders in the United States for some of the materials and equipment for this project if the appro* priate financing could be arranged. The initial application for a dollar loan was made by Mr B. C. Ashwin, Secretary of the New Zealand Treasury, in Washington in November, 1952.

The total cost of the Murupara project was estimated about 84.000,000 dollars. Of this amount about 41,000,000 dollars would be required for timber, chemical pulp and newsprint mills, to

he constructed for and operated by the Tasman Pulp and Paper Company, Ltd. The spokesman said the company initially would receive temporary financial backing from the New Zealand Government. The remaining 43,000,000 dollar! would be required for ancillary services such as housing and expansion of railway, power and harbour facilities which would be provided by the New Zealand Government. The Tasman Pulp and Company planned to produce annually up to 72,000,000 board feet of timber, about 36,000 tons of chemical pulp in excess of needs for production of paper, and about 75,000 tons of newsprint. The spokesman said that about onethird of the loan would provide the' dollar exchange with which the company would obtain materials, equipment and services in the United States for use in the mills now under construction. The procurement of equipment for the erection of these mills was being undertaken by Fletcher-Merritt-Ray-rnond, a joint company formed by a Fletcher Construction Company of New Zealand, and two United States contractors —the Raymond Concrete Pile Company and Merritt-Chapman and Scott Overseas Incorporated. Purchases in U.S. With the remaining two-thirds of the loan the New Zealand Government would finance the purchase in the United States of materials, equipment and services for various ancillary facilities, which were being furnished by the Government as part of the Murupara project. Advances under the credit, would be repaid in 20 semi-annual instalments, beginning in November, 1956. Interest on the outstanding balance! at 43 per cent, per annum would also be payable semi-annually.

It was expected that the funds for this loan would be obtained from private financing institutions in the United States under the bank’! guarantee, said the spokesman.

“I am pleased to announce that information has just been received,” said the Associate Minister of Finance (Mr C. M. Bowden), “that the ExportImport Bank of Washington has approved of a loan of 16.000.000 dollars to the New Zealand Government for financing the dollar costs of the Murupara project, including those involved in the ancillary works such as the railway • and harbour development at Tauranga. “The loan will bear interest at 4! per cent., and will be repayable by half-yearly instalments over a period of 10 years, beginning in November, 1956. “This means that repayments start approximately 12 months after the mills will be in production, thereby effecting dollar savings much in excess of the repayment instalments of the loan. “Approval of the loan, after a full, detailed investigation by the bank, i« further proof of the soundness of the whole project.” Amount Asked For The 16,000,000-dollar loan is what the Government asked for although all previous reports have referred to an application for 20,000.000 dollars, according to the Secretary of the Treasury (Mr B. C. Ashwin). Mr Ash win. said a loan of 20.000.00 ft dollars had been broadly the aim originally. But the amount sought was reduced when it was discovered that certain equipment could be bought out* side the dollar-area.—(P.A.) Search for R..A.F. Aeroplane.—A search for a Royal Air Force Shackleton reconnaissance aeroplane missing with a crew of 10 aboard since yesterday morning was abandoneaJM night. bII