Steel and Tube now local company

Press, 16 July 1980, Page 17

Steel and Tube now local company

Fletcher Metals, Ltd is buying two substantial parcels of shares held by British Steel Corporation (International), Ltd, ip New Zealand companies a nd thereby helping to give these companies asfuller local identity. The total consideration is $13.25 million, to be paid in cash.

Completion of the deals is subject, at present to BSC and Fletcher Metals receiving the necessary consents from Hie relevant authorities in this country and Britain. the holdings are BSC’s 16.1 per cent stake in Pacific Steel, Ltd, and 22 per cent

of Steel and Tube Holdings Ltd.

BSC as of today, continued to have 4.7 per cent of Steel and Tube issued capital, making it rank about fifth in the shareholdings. Before the sale to Fletcher Metal it was the largest shareholder. BSC, which was nationalised by the British Wilson

Labour Government, at present is going through considerable financial stress necessitating moves to aid liquidity. Besides the New Zealand sales, it recently has quit some interests it held in Australia in association with Broken Mill Proprietary Co Ltd. ' -r '■ ■■

Fletcher Metals is a subsidiary of Fletcher Holdings, Ltd. x - A Fletcher spokesman, who announced the two purchases said that the main aim was the Pacific Steel acquisition, The Steel and , Tube purchase

was secondary, and taken up because it was available.. Fletcher would not be acquiring any further Steel and Tube shares beyond the 6.25 million from BSC. That purchase made Steel and Tube a New Zealand company under the overseas investment regulations for the first time. A Steel and Tube spokesman said that the sale

by BSC would reduce overseas holdings in his company to about 6 per cent. The , Fletche.r .spokesman, said that Pacific Steel would become a wholly-owned New Zealand company. He recalled it was founded in 1959 by the Fletcher group in conjunction ..with three British Steel manufacturers, two pf whom later were nationalised (and become BSC). In 1974, Fletcher had acquired the GKN, Ltd. holding of the third company, Pacific Steel now would be owned 44.3 per cent by Fletcher, 41.7 by New Zealand

Steel, Ltd, with the balance of the Shares held by other New Zealand public companies with steel processing and merchandising activities. Fletcher would be receiving the interim dividend to be declared by Pacific'Steel and the final recommended by the board of Steel and Tube. It is believed that Fletcher will be meeting part of the cash to be paid BSC from cash settlements received since Fletcher’s March 31 balance date from the sale of some $7 million worth of investments regarded as peripheral to group mainstream activities. Among these sales is believed to have been a stake of about 5 per cent which Fletcher held.in timber group Henderson and Pollard, Ltd.

Both of the new investments should prove profitable to Fletcher in the future. I Pacific Steel, in its year to September 30 increased production, which included an exports components of 25.5 per cent worth $12.6 million. Recently it has commissioned a plant to recycle tinplate scrap and plans include installation of a car shredder. > Steel and Tube, after a fall of 37.7 per cent in its profit for the year to March 31, because of the last Kinleith strike, still recorded a

tax-paic) result of $3.3 million keeping it well .within the country’s top 30 listed-com-pany .profit earners. Despite the profit slide, the directors have recommended a steady final dividend of 5c (10 per cent), keeping the annual rate at an unchanged 9c. Further, the final payable July 30, is being paid on capital enlarged by a recent one-for-10 cash issue. . '■