Company reneges on $100M Govt stock

Press, 17 January 1986, Page 1

Company reneges on $100M Govt stock

Wellington

The successful tenderer for nearly $lOO million of Government stock at. the last tender . has told the Reserve Bank that it will be unable to pay for it, says the bank’s governor, Mr Spencer Russell. The Reserve Bank is taking legal advice and it now appears a further $lOO million of stock will have to be sold to the market this financial year. Mr Russell said yesterday that the governing director of Rakiura Holdings, Ltd, Mr Brian Alexander, had told the Reserve Bank that the company would not be able to settle for almost

$lOO million of 16 per cent Government stock maturing on October 15, 1991. In the results, of the December 12 tender, the bank said the successful bids for the $lOO million stock of that maturity on offer totalled $99.96 million.

Three maturities of stock, with a total value of $3OO million, were offered in the tender and the October, 1991, maturity was the most eagerly sought with more than $450 million competitive bids.

Mr Russell said yesterday that the terms of the tender required settlement for the stock by 2 p.m. today. “The Reserve Bank is dis-

cussing with its legal advisers the legal consequences of the advice which it has received from the company,” he said. “The advice received from Rakiura Holdings, Ltd, has consequences for the Government’s future internal borrowing programme. “It now appears it will be necessary for a further $lOO million of stock to be sold to the market this financial year,” he said. Other possibilities for the timing and method of sale were under consideration and an announcement would be made soon, said Mr Russell. Mr Alexander could not

be reached for comment.

Merchant banking sources said Rakiura Holdings is a one-man firm based in Wellington, specialising in Government stock and the money market. Mr Alexander was a director of the Wellington merchant banker, Alexander Associates, but one of that company’s three remaining principals, Mr Michael Jensen, said Mr Alexander had left the company 15 months ago and no longer had any connection.

When NZPA called Mr Alexander’s home telephone number, it was told he was overseas and due back on February 17.