Petrocorp shares may go overseas

Press, 24 September 1987, Page 1

Petrocorp shares may go overseas

By

BRENDON BURNS,

political reporter

Overseas companies rather than small New Zealand investors seem likely to be among those offered the right to shares in the Government’s remaining 70 per cent of the oil and gas company, Petrocorp.

The Minister of Finance, Mr Douglas, signalled yesterday that he did not plan to sell the Government’s shareholding on the same wide basis as the Bank of New Zealand share issue. Mr Douglas announced the sale of the Government’s remaining Petrocorp shares only a month after the public sale of 15 per cent of its shares. Earlier, Brierley’s had taken another 15 per cent While July’s Budget outlined plans to complete the transfer of Petrocorp to private control, the Government had said this would not be done this financial year. Mr Douglas told “The Press” yesterday that economic forecasts that his Budget surplus of $379 million was heading for a sizeable deficit was not the cause for now selling Petrocorp. He said the Budget had forecast $1.2 billion from S.O.E. debt repayments or share sales, but asset negotiations with some

S.O.E. boards were not completed. The Court of Appeal ruling on Maori land affected by the new corporations also meant the Government would not be paid for some of its assets this financial year. Petrocorp, meantime, had been the subject of continuing inquiries from investors wanting more shares, said Mr Douglas. "That led us to reassess the position.” Another factor was the lack of an acceptable offer for New Zealand Steel. Selling the remaining Government share in Petrocorp would now raise the required funds to ensure the Budget surplus was maintained. “The mix of getting that money has changed somewhat.” Mr Douglas did not see a need for a wide public shareholding in Petrocorp, which attracted keen interest from small investors in last month’s float of shares. “With the nature of Petrocorp,

it is in fact desirable to have one or two or three players in there with real financial substance.” What was wanted, said Mr Douglas, was the best price that could be obtained for the taxpayer. Brierley’s paid $1.40 for its earlier shares, 15c more than smaller investors. Asked if selling the Government shareholding might not risk flooding the share market, Mr Douglas said this depended on how the issue was handled. He suggested overseas buyers would be considered to avoid a flood of shares. “To the extent of course that some of the shares might or might not be sold offshore, then it is no problem.” The public sale last month of 15 per cent of Petrocorp’s shares had those lucky enough to gain a subscription pay $1.25. Almost immediately the shares rose to $1.90. Yesterday, after Mr Douglas’s announcement, the share price dropped back to $l.BO.