INL buys American newspaper

Press, 3 August 1985, Page 25

INL buys American newspaper

PA Wellington Independent Newspapers, Ltd, has bought an 80 per cent shareholding in a small American suburban newspaper and 17 per cent of the computer and publishing company, CCL Group, Ltd, the chairman, Mr J. A. Burnet, told the company’s annual meeting yesterday. He said the purchase of the stake in “Pawtuxet Valley Daily Times,” which circulates in West Warwick, Rhode Island, was a “first” for any New Zealand newspaper group. The evening newspaper had a paid circulation of 9377 and also published two free weeklies.

“We have started in a small and cautious way while we feel the ground. But that does not mean to say that, provided there are suitable opportunities, we won’t expand,” Mr Burnet said. “We want to continue to expand in that country of great free enterprise.” He said the three newspapers would continue under the management of the managing editor, Mr Ted Holmberg, who would retain a minority shareholding in the enterprise.

“This investment has the advantage of providing the opportunity to train and develop INL executives in newspaper publishing in a different environment,” Mr Burnet said. “It has the further advantage to INL of obtaining knowledge of new technology which we plan to introduce into our New Zealand operations.” In statements to the Stock Exchange, INL said funds for the American newspaper acquisition were provided mainly from off-shore investments and that INL paid 250 c a share for 612,547 shares in CCL.

This represented 14.25 per cent of CCL’s issued capital and brought INL's holding up

to 17.1 per cent. Two CCL directors, Messrs E. S. Williams and J. W. Holdsworth, each had a 25 per cent shareholding. Mr Burnet told the Stock Exchange that the INL purchase was related to CCL computer activities and not to CCL’s publishing interests. CCL is a 50 per cent shareholder in Fourth Estate, which publishes the "National Business Review,” with the Australian publisher John Fairfax, Ltd, holding the other 50 per cent. The purchase of 17 per cent of CCL’s shareholding followed “mutually satisfactory discussions” with CCL major shareholders, he said. Now that INL’s newspaper and commercial printing production was becoming increasingly computer-based there was scope for mutually beneficial co-operation with a computer operating company. There would be opportunities for inter-company trading and assistance. “For example, INL was a founder-user of the CCL payroll system and arrangements were recently made for CCL to undertake facilities management of the INL computer operation,” Mr Burnet said. INL was trading well over the first months of the financial year. “Nevertheless I must sound a note of caution,” he said. “There are many uncertain features which could influence the economy and therefore the level of business generally in the months to come,” he said. Messrs I. L. McKay, J. H. D. Wickham, J. W.Crook, J. Dent and Miss S. M. Moran were reelected as directors. The meeting also approved special resolutions allowing INL to increase its board from nine to 10 and to increase directors’ fees from $56,000 to $77,000. Fortuna 5c Directors of a toy manufacturer, Fortuna Corporation, Ltd, have announced that a final tax-free dividend of 5c a share (10 per cent) will be paid September 2. This brings the total tax-free dividend paid to shareholders for the year ended March 31 — the company’s first year of trading — to 9c (18 per cent). Books close on August 16.