Comalco‘Nearer To Australian Listing9

Press, Volume CVIII, Issue 31596, 6 February 1968, Page 17

Comalco‘Nearer To Australian Listing 9

- (N.Z. Press Association— Copyright) SYDNEY, February 5. Comalco Aluminium, which has plans to establish an aluminium refinery at Bluff, has now moved a lot closer to making an appearance on Australian stock exchange lists, the “SunHerald” has reported.

Alone among the three aluminium producers in Australia (Alcan Australia and Alcoa are the other two), Comalco, which is jointly owned by Cbnzinc Riotinto of Australia and Kaiser Aluminium and Chemical, is now in the big profit money and stands to earn appreciably more this year, the “Sun-Herald” said.

Both Comalco’s chairman (Sir Maurice Mawby) and its managing director (Mr D. J. Hibberd) have made no secret about the company’s firm objective to admit the Australian publie ownership sooner or later. For one, Mr Hibberd is understood to favour the view: "Let’s do it sooner rather than later.” But companies need more than just a desire togratify the urge Of nationalistic investors to make them take the near-irrevocable step to public participation. Key To Timing The key to the timing of Comalco’s opening of its door to the public would seem to Tie in its involvement in the

planned setting-up of the Bluff aluminium smelter, on which unofficial estimates have put a price tag of between sl2omsl4om. Comaleo said last week that the Bluff project, to be fed by hydro-electric power the New Zealand Governmentbuilt Lake Manapouri scheme, would involve the building of a smelter with a capacity Of about 105,000 tons a year “with a view to having the first 70,000 tons of capacity in operation in late 1970."

Japanese Partners Comalco announced last week that it had lined up two ' willing Japanese partners—- ’ Showa Denko and Sumitomo i Chemical—for the Bluff project, but did not indicate specifically bow the funds Would be raised. Even if an-, equal three-way division of the capital cost is agreed between the partners, it is most unlikely that Comalco would raise all of its s4om plus, in the form of equity capital. The present share capital of s3om is dwarfed by loan and debenture capital of $68.9m, including $28.2m in loans from the C.R.A. and Kaiser shareholders. <

Management is likely to favour the view that an expensive capital item such as a smelter—which stands to produce a large cash flow within a reasonably short period—should be financed mainly with redeemable fixed interest capital.