5 October 2001
Arthur Andersen Corporate Finance has been appointed to appraise Logan Corp Ltd’s full takeover for Pacific Retail Group Ltd.
Steel & Tube Holdings Ltd and Australian joint venture partner One Steel Ltd have agreed to sell the Canadian steel distribution business of AJ Forsyth & Co Ltd to Russel Metals Inc of Ontario for cash, which for Steel & Tube is expected to be slightly above the $C24.9 million (net, before minorities) book value. Steel & Tube chief executive Nick Calavrias said the sale would end the growth strategy in as market where the company had determined returns this business cycle were unlikely to be acceptable. “We will now focus our growth strategy in Australia & New Zealand, where it is considered to be more advantageous for our shareholders.”
The Government turned back the clock yesterday, recognising Air New Zealand as a national flag carrier promoting the New Zealand brand abroad, a philosophy expressly abandoned (although not entirely relinquished) when the airline was privatised 12 years ago. The programme to save the airline requires the Government to invest up to $885 million in two stages, the first $300 million by 19 October and initially as a loan (at the 90-day bank bill rate plus 4%, currently about 9.3% in total), to be turned into convertible preference shares later at 24c/share. The rest will be taken up as ordinary shares at a price determined after due diligence. If that price is below 24c, the preference share price will also be cut. Acting chairman Jim Farmer said shareholders’ funds had fallen to $156 million after recognition of $350 million in further Ansett Australia losses, from $506 million at 31 August. The second recapitalisation phase will be conducted in December-January. The Government will then hold 83% of the company. The airline will announce flight schedule reductions as soon as its new board has looked at them, to significantly cut costs.