Ariadne selling its Giant Res. stake

Press, 1 December 1987, Page 49

Ariadne selling its Giant Res. stake

NICK BROWN

NZPA Sydney Ariadne Australia is relieving its debt burden substantially by selling its 39 per cent stake in the mining company, Giant Resources, for sAust3oo million (SNZ32SM). Ampol, the petroleum subsidiary of Pioneer Concrete Services, has bought 54.7 million Giant Resources shares and all the options held by Ariadne for $Au5t166,838,138 cash. A second sale of 60.5 M Giant shares for $Au5t133,161,862 is conditional on Giant Resources shareholders’ approval, as Ampol holds 19.9 per cent of Giant after the initial sale. Ariadne’s chairman, Mr Bruce Judge, who recently described Giant Resources as a “world class resource company,” said Ariadne would make about sAustlsoM profit on the sale of its Giant intprpcfq He told NZPA that since the sharemarket crash Ariadne had been looking to reduce its debt but not its- cash flow. “Although we liked

Giant and I think we may have sold too cheaply in some ways, you have to bear in mind that we had only 40 per cent of the company.” “To exercise our options to get our interest over 50 per cent would have cost SIOOM in further cash and Giant is not paying dividends at the moment, so there is no cash flow into Ariadne. “So we changed strategy because of the changed market and Giant unfortunately had to be largest thing we let go. "It still leaves us with core banking, property, and industrial earnings intact and reduces our debt considerably.” Mr Judge said the sale of one of Ariadne’s biggest assets would put “hard numbers” on Ariadne’s balance sheet, rather than just directors’ valuations. With shareholders’ funds of about sAustBooM, he said Ariadne’s gearing would be a “lot less than one to one” through the Giant sales. Ariadne formed Giant as its resources arm last year, putting its mining company holdings into the

group which under a new management team over the last eight months has acquired gold and base metal interests in Australia, New Zealand, Canada, and South America. Giant’s chief executive and Placer Pacific’s managing director, Mr Bob Needham, said recently that Giant’s alluvial gold joint venture in the Grey River Valley was expected to produce revenue of sAust7sM a year by 1991 when in full swing. Ampol’s chairman, Sir Tristan Antico, said Ampol had bought the 54.7 M Giant shares at Aust22oc a share, bought 17.6 M listed options in Giant at Aust2sc a share and 34.8 M unlisted options at Austl2lc a share. When all the options are exercised, and, if Giant Resources shareholders approve the second sale of shares, Ampol will own at least 44 per cent of Giant. Sir Tristan said the Pioneer Group could provide opportunities through its existing activities that would greatly benefit the Giant shareholders and the group as a whole.