Take-over finance ‘almost concluded’

Press, Volume CXI, Issue 32701, 2 September 1971, Page 1

Take-over finance ‘almost concluded’

(N.Z.P.A. political correspondent) WELLINGTON, September 1. It seems likely that private enterprise, assisted by bridging finance from the Government now will be able to raise the capital needed to take up the New Zealand half share in the Union Steam Ship Company. Industry sources tonight said that up to a fortnight ago the bid was “hanging fire,” but since then more interest had been shown.

A meeting will be held tomorrow between the ! Government and representatives of the New Zealand consortium which would share ownership with Thomas Nationwide Transport of Australia. It is expected that sufficient New Zealand backing will be available for the project to proceed without direct Government shareholding.

It is understood that the New Zealand companies will have to raise about s6m in cash for their half 'of the Union Company. A reliable source said that only about s4m had been in sight a fortnight ago but since then other companies had shown interest and now it seemed that the full amount would be available, aided by Government bridging finance. Interest rate Interest on this finance, it is understood, will be one of the questions which will be discussed at tomorrow’s meeting. But it is expected to be about 6 per cent, and be for up to seven years. Among those expected to be present at tomorrow’s meeting are Mr E. H. P. Abeles, the managing director of T.N.T., Sir Reginald Smythe, head of New Zealand Forest Products, Ltd, who is spokesman for the consortium, and Mr R. A. Owens, of R.A.O. Holdings, Ltd, which earlier made an unsuccessful bid for a New

[Zealand take-over of the , I Union Company. Recent indications of diffi- ’ culties likely to be encount- ’ ered by private enterprise in I raising its share of the deal , had led to suggestions that [ the Government might have 1 to take a shareholding in the t bid to ensure its success. And

Sir Reginald Smythe had earlier complained that the Government had left the loan market bare. Three factors Whether the Government would have to take up a shareholding would depend on three factors to be resolved at tomorrow’s meetings, the Minister of Transport (Mr Gordon) said. These were the questions of interest on bridging finance and the repayments and whether finance would be available from trade-union sources.

He said that there would be three meetings tomorrow: between the Government and the principals of the consortium; one involving the members of the consortium itself; and one between the consortium and T.N.T. “The Government is anxious to see the deal consummated,” the Minister said. He expected firm, “and even final,” decisions to be made tomorrow. Mr Abeles said in Auckland today that the deal by which New Zealand firms would provide 50 per cent of the s6m equity was on the verge of conclusion. “It’s getting close to being right,” he said. “Once we have clarified our relationship it goes into the hands of the

lawyers to have the loose ends tied up.” Mr Abeles said that at least 20 New Zealand comi panies were interested in I backing the take-over and : they would meet the Govern- : ment tomorrow to hear de- : tailed Government proposals II to provide loan finance. After that, the New Zealand consortium, Mr Abeles i and three other T.N.T. representatives would meet to con-' elude the deal. The partnership would definitely be in control of thej Union Company by the end of the year, Mr Abeles said. Progress had been slow up to now , because so many people were involved, hut there appeared to be no futther obstructions.