UNION STEAM SALE SETTLED Government shares may not be needed

Press, Volume CXI, Issue 32702, 3 September 1971, Page 1

UNION STEAM SALE SETTLED Government shares may not be needed

(New Zealand Press Association) WELLINGTON, September 2. New Zealand companies and the Australian firm, Thomas Nationwide Transport, are to acquire the ordinary shares of the Union Steam Ship Company at present held by the British P and O Group.

The New Zealand Government will provide bridging finance, and will also buy shares in Union Steam, on a temporary basis, if this is necessary to ensure a 50 per cent New Zealand ownership.

This was announced today after a series of meeting between the New Zealand firms, headed by the managing director of N.Z. Forest Products (Sir Reginald Smythe), T.N.T. led by the company’s managing director (Mr E. H. P. Abeles), the Minister of Transport (Mr Gordon) and Government officials.

The Government has approved the take-over almost a year after the first public announcement of the possible change in ownership of Union Steam.

The price to be paid to P and O by the two groups for Union Steam will be about s24m, of which sl2m will be in cash.

One of the main reasons for the long delay was the difficulty that the New Zealand companies experienced in finding their s6m cash share.

New company

The New Zealand firms will form a new company next week called New Zealand Maritime Holdings, Ltd, to hold their 50 per cent interest in Union Steam. The T.N.T. interest will be held jointly by T.N.T. Shipping (New Zealand), Ltd, owned by T.N.T., and Bulkships, Ltd, in which T.N.T. has a one-third interest. Mr Gordon said that present indications were that private interests would take up the whole of the s6m New Zealand share. If the Government did have to buy shares it would be on a "very temporary" basis, he said.

; It would seem that the : maximum amount the Gbv- ■ eminent might have to find I would be about slm. i Mr Gordon confirmed that Mr R. A. Owens, of Tauranga, who at one time led a rival take-over bid, had made i a firm commitment, which , would make his company a . substantial shareholder. Mr Gordon said that an interim directorate for the . new company had been I authorised to complete , arrangements for New ZeaI land Maritime Holdings, and r —in line with the expressed [ wishes of T.N.T. and Australian interests^—the need . for a Government appointee t to the board would be for > a short term, only until the f balance of .the sBm was taken . up. ' Union interest He said the Seamen’s ’ Union’s rules prevented it from owning shares, but certain sections of tne union were sympathetic towards the idea. Any investment by the union would be more than welcome, and the Government would be- happy to make available to it the same generous terms and conditions it had offered to other participants. Mr Abeles said the price of s24m was at January, 1971, and final adjustments made after completion of the Union Company’s balance sheet

might result in a variation of a few hundred thousand dollars on this figure. - Half the s24m had to be in cash, and the remainder in medium-term and longterm loans. The medium-term

loans were from the vendors',’ the P and O Group. Mr Abeles said that after the New Zealand group had formed its company that company and T.N.T. would take up jointly shares in a new holding company. That company would then make a formal offer to P and O, and a legal agreement would be prepared. “I would say that we

should be able to take over Union Steam from P and O no later than the end of the year,” he said.

“Human approach”

Asked what steps he thought the news owners could take to restore Union Steam to profitability, Mr Abeles said: “I don’t think we can pull a rabbit out of a hat. We must adopt a common-sense and human approach, and weld company staff, captains, seamen, everyone, into a team. That will contribute in a large way.” He had no doubt about the efficiency of Union Steam’s roll-on ships, and he thought there should" be more unit loaders, and perhaps specialised ships for the timber and paper trade.

Sir Reginald Smythe said that the New Zealand companies had made firm commitments for $3.5m, but this figure could rise to $4.75m. Forest Products had decided to invest $500,000, and it was prepared to double that figure if Tasman Pulp and Paper invested slm. Mr Gordon said that if Tasman came in on this basis the company would then be definitely over-subscribed. Sir Reginald Smythe said that some 40 companies had already joined the consortium, and a number of others had indicated interest. “We hope also to be joined in this venture by interested New Zealand trade unions," he said.