Mt Cook welcomes Air New Zealand interest

Press, 1 October 1983, Page 20

Mt Cook welcomes Air New Zealand interest

Financial Editor

Mount Cook Group, Ltd, has welcomed the greater interest in the company by Air New Zealand, which has increased its Mount Cook shareholding to 45 per cent. However, both companies are silent on the immediate effects of the deal. “At this stage I would like to say that I believe the move can only be for the future good of the company,” said Mount cook’s chief executive, Mr P. S. Phillips. “Air New Zealand has had a long involvement with our company starting with the old NAC, without whose active encouragement and assistance our airline operation would never have started. Internationally Air New Zealand has aided our overseas marketing since the early 19605. It was because of this association. that NAC took the original ' shareholding in our company which, because of the merger, was transferred to Air New Zealand. -

“For a number of years rumours have abounded of take-over bids for our company. Had a substantial shareholding fallen in the wrong hands, then we could well have found ourselves working for another operator, and finally losing our identity and heritage, as has already happened to more than one pioneer. “That original NAC investment was designed to prevent just such a happening, and in arranging it Sir Henry Wigley proved his far-sightedness and his earnest desire that company ( ownership always remain in New Zealand hands,” Mr Phillips said. “Let me say that it was emphasised that there is no intention of a merger, in fact, the application to the Examiner of Commercial Practices specifies a maximum holding of 45 per cent.”

The two companies have already achieved a fair degree of co-operation, especially in tourist promotion, sharing of certain facilities, and leasing of planes to each other. Such co-opera-tion is likely to increase. Mount Cook may extend its network to take over some of Air New Zealand’s less busy branch lines, applying its expertise and flair

in running a lean operation, avoiding excess staff numbers and using aircraft better matched to the traffic volumes. Subject to the approval of the Examiner of Commercial Practices, Air New Zealand is to purchase the 30.3 per cent shareholding of the NZSB Group, Ltd, in the Mount Cook Group. The sale would involve the transfer of 1,918,615 ordinary shares and 722,267 convertible specified preference shares. The consideration for the sale is 390 c for each ordinary share and 360 c for each specified preference share, and is on an ex-dividend basis, making a total price of $10,082,000. The NZSB Group chief executive, Mr David Chalmers, said that although the association with Mount Cook Group had been profitable for NZSB, the shareholding was no longer consistent with the group’s strategic development plans. “We are in the financial services business, and it is to this sector that we will be directing our thrust,” he said. Mr Chalmers added that he believed that a closer relationship with Air New Zealand could only enhance Mount Cook, prospects. Air New Zealand’s chief executive, Mr Norman Geary, said: “Air New Zealand has applied to the Examiner of Commercial Practices to obtain agreement to increase its historic 15 per cent shareholding in Mount Cook Group to no more than 45 per cent.

“The acquisition of the NZSB shareholding is pursuant to a long-standing agreement whereby NZSB gave Air New Zealand the right of first refusal in respect of its shareholding.” There was no question of the Mt Cook Group being merged with, or becoming a subsidiary of Air New Zealand. “As far as Air New Zealand is concerned the Mt Cook Group will remain in its present form in every respect. There is, however, tremendous scope for the two companies to significantly increase their joint promotion of New Zealand tourism and the respective products,” he

Air New Zealand would develop this further with the Mt Cook Group board of directors. Mr Geary said his company was enthusiastic about the potential for a closer promotional relationship.