G.P.O). sold $10M below

Press, 13 December 1989, Page 2

G.P.O). sold $10M below

By

PATTRICK SMELLIE

in Wellington

The Government Printing Office . will be sold ,to a littleknown Auckland investment company, the Associate Minister for. State-owned /Enterprises, Mr Netlspn; annouriced yesterday." The buyer, Rank Group," Ltd, will pay $23 million for the office.

The fact that this was less than the book value of the printer’s assets reflected the difficult state of the New Zealand printing industry, said Mr Neilson. The $23 million sale price is about $lO million less than the value of the assets as shown in the most recent annual report. The sale brings to $43.5 million the total amount realised from the sale of the business, and its buildings ($20.4 million). The P.S.A says it went for “a song” and was a shameful waste of a State asset. Mr Neilson said there had been more than one bidder for

the printing office, and at least one foreign buyer had gone as far as in-depth scrutiny of its affairs. However, some bidders who had existing printing. businesses were put- off by the erratic workloads created by the office’s biggest customer —

Parliament. The G.P.O. — which would soon be renamed — would continue to do Parliamentary printing under contracts which would run an average of four years. After that, Parliament would put its contracts out to tender. Much Government departmental printing is already done by private sector printers and the printing office has been competing for private work since 1986. Mr Neilson rejected suggestions that Parliament would find it difficult to foster competition for the office by using any other printer, despite the special demands of Parliament.

The sale agreement ensured that the public would still have

access at reduced cost to legislation and other Parliamentary documents.

The Government was selling its printing office because, after 125 years, it had developed as far as it could under State control. ;Z Technology advances and . the need for new capital investment faced the printer in coming years, and the Government was not prepared to invest further in the printing business. The purchase will mean a four T fold increase in size for Rank/ which is listed in its last annual report as having total assets of $8.5 million. Its executive director and 65 per cent owner, Mr Graeme Hart, said the plan was to improve and expand the printing office’s operations. He hoped there would be few or no redundancies, and Rank would pick up any such costs under the terms of the deal.

He intimated other deals put to the Government had included

lower offer prices because they expected to lay off staff. However, he agreed that the economic Climate made it a good time to buy a printing business. His company would have to be extra diligent to ensure-that the secrecy bf Government publications such as the Budget was preserved, he said. Rank would fund the purchase through both equity and some loan raising. There was no plan for an issue of shares at this stage, and the company carried no debt.

A brief company history released yesterday showed Rank had bought and sold several companies in recent years. But at this stage the company intended to be a long-term owner of the General Printing Office. The Opposition spokesman on S.O.E.S, Mr lan McLean, said there would be checks made to “assure that this deal is not as shonky as most of the other major Government asset sales.”