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Float based on IH Credit Company

PA Auckland A new finance company, to be floated to the public this month, will be built on the existing International Harvester Credit Company of New Zealand, Ltd, which changed hands last year. The company, AIC Finance, Ltd, has been formed to acquire the capital and business of AIC International Finance, Ltd, which resulted from a name change by IHCC of New Zealand last month. New services to be added will extend the company’s activities into money-mar-ket and wholesale-finance fields, operating from Auckland. The move was announced yesterday by the Australasia Investment Company, Ltd, an Auckland-based investment banking company which in May bought International Harvester NZ, Ltd from its troubled Chicago parent. The AIC directors said

that since the acquisition there had been a major rearrangement of group interests aimed at expanding finance-industry operations. The finance company operation has been a consistently profitable side of International Harvester in New Zealand. Net after-tax profit of the renamed AIC International Finance grew steadily over the last five years, from $403,079 to a record $1,003,000 in the year to last October.

The marketing and sales of International Harvester equipment lines are not part .of the float and will remain a separate operation owned 100 per cent by the Australasia Investment Company.

It is believed that the float involves a $l2 million issue of shares. The shares will have a 50c par value, but, given the strong profit performance of AIC International Finance, will be issued at a premium. The managing director of AIC, Mr R. H. Worn, said the new company expected to register a prospectus for the public issue on April 18, Australasia Investment Company subscribing for 75 per cent of the shares. The remaining 25 per cent will be offered to the public, after which the company intends to seek stock exchange listing.

The Australasia Investment Company is a New Zealand-controlled investment bank established last

year in conjunction with Bahrain-based Kuwait Asia Bank, which owns 49.9 per cent. The terms of the float will indirectly give Kuwait Asia Bank a 37.4 per cent stake in AIC Finance. Mr Worn said that AIC had concentrated on

strengthening AIC International’s financial position since the acquisition last year and on expanding the product range marketed in New Zealand. It was expected to report a turnaround to profit in the present October. “This new move is designed to separate marketing and financing, operations and to permit AIC Finance, Ltd, to operate as a ‘full service’ finance company,” he said. The traditional business of hire-purchase financing of AIC International’s sales would continue and remain based in Christchurch, but a new chief executive would be appointed to oversee new money market and wholesale finance activities and expansion from Auckland. The strong South Island associations of the former IG group will be maintained by the appointment as chairman of AIC Finance of Mr J. M. Ott, a Christchurch chartered accountant. Other directors, who have had finance industry experience, include Mr D. H. Scott, the chairman of AIC; Mr Worn; and Mr J. L. House and Mr C. J. August, the general manager and assistant general manager, respectively, of Kuwait Asia Bank. The new chief executive will also join the board on appointment. The broker to the issue will be Auckland-based Jordan Sandman Smythe and Company.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19840412.2.131.5

Bibliographic details

Press, 12 April 1984, Page 26

Word Count
553

Float based on IH Credit Company Press, 12 April 1984, Page 26

Float based on IH Credit Company Press, 12 April 1984, Page 26