Samoan govt makes late shipping line bid
The New Zealand government has sold its stake in Pacific Forum Line, but a late play by the Samoan government will see the shipping line remain in regional hands.
Last week Fairfax reported PFL's board had approved the shipping line's sale to the privately-owned Sofrana and that the Labour Party's Phil Goff had concerns the "secret" sale to private interests could strangle economic development in the Pacific.
But in a surprise development the Samoan government announced last week it had exercised pre-existing shareholder rights to trump Sofrana's offer and become the sole owner. A statement from the Samoan government said the transfer of shares will be completed today.
New Zealand and 11 island countries had equal voting rights in PFL, but practical control has been exerted by New Zealand, Fiji and Papua New Guinea which between them owned around three-quarters of the company's shares.
New Zealand's 23 per cent stake was valued at $1.16 million in 2011 and entitled the Ministry of Foreign Affairs to appoint one director to the board.
Benoit Marcenac, the managing director of Sofrana's New Zealand subsidiary, did not return calls but in a written statement confirmed his company had recently made a formal offer for PFL. "Our offer was a surprise to the shareholders. However the board of PFL decided that it was appropriate to consider such an offer and Sofrana consequently submitted a binding offer," Marcenac said.
Founded in 1978, PFL was intended to encourage economic development in the islands and provide competition to ensure private shipping operators were unable to create a monopoly in the Pacific.
The line has experienced heavy weather in recent years with significant losses reducing net assets to $5.1m by June 2011. It is understood shareholders were faced with a choice whether to sell or recapitalise, and that the New Zealand Government was pushing for the latter.
Last week Foreign Affairs Minister Murray McCully argued PFL no longer fitted its purpose, but said any decision to sell would be made by all shareholders. "It now owns and operates no ships and participates in what is effectively a code share relationship with private sector shippers."
Tupuola Tuala, chairman of the Samoan government's shipping service, did not disclose the purchase price, but said the sale was on a going concern basis and did not involve writing off any debts.
Tuala said the Samoan government was committed to PFL's founding objectives of encouraging economic development in all Pacific countries.