N.Z. Post evalued at $250M

Press, 27 June 1987, Page 2

N.Z. Post evalued at $250M

Wellington reporter

The Government and New Zealand Post have agreed to “a transfer evaluation of $250 million for the assets to'be taken over by the . new Stateowned enterprise. The agreement, which was announced yesterday, is the second final asset evaluation between the Crown and an S.O.E. The first was for the assets of the Post Office Bank. Three components will make up the $250 million settlement: $l2O million of shares, representing a 100 per cent equity holding by the Crown. " ’ ' $6O million worth of long-term Crown liabilities (mainly staff backpay, holiday pay and retirement leave) which will be taken over and discharged by New Zealand Post. A cash sum of $7O million which will be paid to the Crown over five years. Discussions are continuing on the shape of the capital structure and the detail of the sale and purchase agreement. The precise terms will be set out in a full agreement and tabled in Parliament. The Minister of Finance, Mr Douglas, said yesterday that the Government had not considered selling shares in New Zealand Post to the public.

The S.O.E.’s chief executive, Mr Harvey Parker, said there were no price rises “in the pipeline” and that New Zealand Post should show a modest profit in its first year’s trading.

This would follow three successive years of losses by the former Post Office, including an estimated loss of $4B million in 198687. Mr Parker said New Zealand Post was addressing the issues of cost control and the reallocation of capital resources into productive areas. Staff would be cut from 12,000 to 10,000 by attrition, and unnecessary services eliminated. New Zealand Post would also question the wisdom of having its buildings in city centres, where - land prices were high and - the • streets; con■gesteUr” 22 ’ , . Auckland’s Central Post Office resembled “Dante’s Inferno” as far; as . mail sorting was concerned, said New Zealand Post chairman, Mr Michael Morris.