Lanes welcomes merger reactions

Press, 12 June 1986, Page 24

Lanes welcomes merger reactions

By

SIMON LOUISSON

in Wellington

Lanes has welcomed the separate decisions of Kiwifruit Industries and Horticultural Industries to accept merger proposals with Lanes. Last week, HI directors recommended acceptance of the offer of one Lanes share for every two HI shares. KI directors also recommended acceptance, on independent advice, after reporting a maiden net operating loss of $126,000. Lanes’ chairman, Mr John

Isles, said that the central point of the merger was that each company would better fulfill its potential within the new entity. He said the group would have a strong balance sheet with an equity ratio of 55 to 60 per cent, which would enable development to be stepped up. Exchange rate fluctuations would be cushioned by the completmentary nature of activities, and cash flows would be more even. Short-term financing requirements would be relatively less than they had been as separate units.

The companies will be run as separate units to ensure fully accountable management control. There would be no redundancies as a result of the merger, said Mr Isles. Activities other than orcharding, such as the plant hire operation and fruit handling, will be of major importance to the group. Operations in Australia would become increasingly important, with management repositioned there to achieve the same results that had been achieved in New Zealand.