NZ Steel discloses doubts on Govt’s sale timing

Press, 11 June 1987, Page 26

NZ Steel discloses doubts on Govt’s sale timing

PA Wellington NZ Steel’s chairman, Mr Syd Pasley, has < disclosed that he told the Government on Monday it was too early to sell the . company as the commissioning of the stage two expansion was unfinished and contracts had yet to be completed with the coal and electricity corporations. He said intending buyers would take these points seriously.

The Government on Tuesday opened bids for its 90 per cent shareholding in NZ Steel amid Opposition charges that the move was an election stunt, but any sale negotiated is unlikely to be

concluded before polling day.

The Minister of Trade and Industry, Mr Caygill, said that even if an NZ Steel sale was concluded quickly the process of Overseas Investment Commission approvals or consents by the Commerce Commission is likely to delay the final transfer of the Government’s shareholding for some months. Though a sale is unlikely to be concluded quickly, the Government’s announcement that it intended to begin sales talks had an immediate effect on the sharemarket, pushing NZ Steel shares up 5c to 60c a share with much higher volumes traded than usual, a Wellington

newspaper said. • The Opposition leader, Mr Bolger, earlier accused the Government of panicking in its sale of NZ Steel shares “because it wants to play politics

with the sale at election time.”

The Government's decision follows a report by its consultants — Samuel Montagu of London and” Wellington sharebrokers Buttle Wilson — that the

sale of the Government’s majority shareholding should proceed as quickly as possible.

Mr Caygill stressed NZ Steel’s minority shareholders would also be offered a chance to sell their shares to any buyers, in line with the

deal that the Government made with the company in December, 1985, when it moved to take over $1.38 billion of NZ Steel debt in return for an 82' per cent shareholding.

That shareholding was increased to 90 per cent

late last year when the Government was forced to inject another $BO9 million into the company to complete its financial reconstruction.

Mr Caygill acknowledged on Tuesday that the Government would take a substantial loss on

the move. Mr Pasley said that the board thought the sale was a little early “in terms of the commissioning process.”