FAI writes off stake
NZPA-AAP Sydney FAI Insurances has written off the value of its 48 per cent stake in Fine Metals Corp because it fears the Bank of New Zealand will abandon an agreement to reconstruct the finances of the gold refiner. FAI launched a 45 cents a share offer for Fine Metals in April, valuing the company at sAustl3.2 million (SNZI6.92M), and its stake still has a market value of sAust2.6sM ($3.40M) based on the last trading price of 20 cents.
However, FAI chief executive, Mr Rodney Adler, said in a statement the value of the stake would be written down to zero because
he feared a proposal to reconstruct the company would be rejected by BNZ, which is Fine Metals banker and 23 per cent shareholder. FAI had threatened to abandon its bid after it found Fine Metals had overstated its December half year profit by 50 per cent. The bid went ahead after FAI reached an agreement about the future of the company with directors and other major shareholders. But it appears FAI now fears that a review of BNZ’s Australian operations following the bank’s massive $633M loss last financial year will mean the end of the Fine Metals agreement.
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Press, 14 August 1989, Page 28
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204FAI writes off stake Press, 14 August 1989, Page 28
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