Govt may be asked for quarter of Union Co. cost

Press, Volume CXI, Issue 32635, 17 June 1971, Page 3

Govt may be asked for quarter of Union Co. cost

(New Zealand Press Association)

AUCKLAND, June 16.

Because of the acute shortage of loan money, the Government might well be called on to take up a temporary 50 per cent share of the New Zealand content in the Union Steam Ship Company take-over, said Sir Reginald Smythe, managing director of N.Z. Forest Products, Ltd, today.

Sir Reginald Smythe was replying to the Minister of Finance (Mr Muldoon), who had said that bridging finance for the Union Company had been offered publicly for some time and each request would be treated on its merits.

It had also been made clear that the Government did not propose to participate directly in ownership of the company, Mr Muldoon said. Mr E. H. P. Abeles, of Thomas .Nationwide Transport, had informed the Government that he did not want any direct Government participation. Mr Muldoon said that Sir Reginald Smythe's remarks earlier this week regarding Government stock ratios were "misleading and unhelpful.” Total internal Government borrowing last year was only s7om, compared with slolm the previous year.

OWN STIPULATION Sir Reginald Smythe said today that while Mr Abeles,

managing director of T.N.T., would probably be happy to take over the Union Company on his own. it was the Government which had stipulated.a 50 per cent New Zealand shareholding. On Mr Muldoon’s statement (hat each request for bridging finance would be treated. on its merits, Sir Reginald Smythe said: “We do not know the amount of bridging finance that would be offered, or the terms.” And on the Government’s refusal to-participate directly, he added: “if that’s their attitude, we’re not going to get anywhere;" Sir Reginald Smythe said: “I can well imagine as a start the Government holding a certain amount of shareholding in the company as a temporary measure. When the company got on its feet the Government could dispose of this' holding. The Government should go 50-50 with private enterprise. SLOW PAYMENTS “AH of us (the seven New Zealand companies supporting the bid) are faced with a situation where debtors’ payments are slowing and the whole banking and credit system limits us all. Every single one of us is facing the same situation. “There is a limit put on overdrafts, and it seems to me that everyone is leaning on everyone else.” Sir Reginald Smythe emphasised that the group he represented was doing its utmost to be helpful. “Our attitude is totally constructive. There’s nothing negative about it We want to he helpful to the Government and to New Zealand. We’re all New Zealanders and we believe New Zealand is a great country, but we’ve got to get doWn to tin tacks,” he said. This Involved all matters concerned With production and distribution, and with ensuring industrial peace and harmony. The group of seven were not the only companies exporting. Many small companies needed effective shipping if they were to get their goods to Australia and the Pacific Islands. HELP PROFFERED On Mr Muldoon’s allegation that his remarks about Government stock ratios were misleading, Sir Reginald Smythe said. “Due to economic conditions, all the

various financial institutioi have less to invest, so as group we have less to borro to put into this bid. Yc can’t have it all ways. "I don’t see where tl Government's own borrow ings come into it.”

>ns Sir Reginald Smythe i a emphasised that he had no ow desire to put the Government 'ou in a difficult position on the contrary, he and the the others in the group wanted iw- to be of maximum help in the Union Company bid.