‘NBH not following lEL break-up plan’

Press, 10 February 1986, Page 34

‘NBH not following lEL break-up plan’

PA Hobart The managing director of North Broken Hill Holdings, Ltd (NBH), Mr Mark Bethwaite, has denied that his company was selling off assets in line with a demerger plan drawn up by its suitor, Industrial Equity, Ltd (lEL). Mr Bethwaite said NBH’s approach to any sale of its assets would be a “divestment in an orderly and rational manner.” The lEL demerger plan and its “fast buck” mentality represented a “fire sale” on a fixed timetable. As part of his sAust2so million partial bid for NBH launched last month, lEL’s chairman, Mr Ron Brierley, also put forward a demerger plan for the break-up of the NBH group. Mr Bethwaite said NBH had been investigating the sale of its interests in ERA, Beech, Alcoa, and Hardboards of Australia, Ltd, “for some time.”

In the past six years North had sold investments valued at sAust2so million at a capital profit of sAust7oM. “We are continuing to explore opportunities for the sale of these and other assets,” Mr Bethwaite said. “The essential difference between NBH and lEL is that lEL proposes

to conduct a fire sale of those investment interests still in the NBH group,” he said.

“That is not our policy. We have had a clear strategy for some years to achieve a divestment of those interested in a rational and orderly manner which will maximise returns to shareholders and reflect the underlying asset values of those investments.” Mr Bethwaite also discarded suggestions lEL had struck an agreement with the Tasmanian Government on the basis of a successful demerger of NBH returning management of its Tasmanian operations to the island state.

Since the 1974 state budget a one per cent surcharge on payroll tax has applied to all major interstate companies operating in Tasmania. NBH’s merged operations with Electrolytic Zinc Co of Australasia, Ltd (EZ), and Associated Pulp and Paper Manufacturers (APPM), make it Tasmania’s largest employer, with an annual salary and wage bill of $143 million.

Mr Bethwaite said he had received an assurance this week from the Premier, Mr Robin Gray, there was "no deal” between lEL and the Tasmanian Government. Mr Bethwaite was speaking at EZ’s Risdon

plant where the NBH board is meeting to discuss the group’s planned capital expenditure programme for its Tasmanian operations.

He said NBH’s investment programme would be jeopardised if the lEL bid were to succeed, but said discussions would continue regardless of the lEL bid. Mr Bethwaite vehemently repeated the North board’s rejection of the lEL bid and demerger plan. He reiterated that the sAust2.so a share offer was too low and would need "substantial” revision if the lEL bid were to succeed.

It offered no premium over the ruling market price for NBH at the time the lEL offer was launched.

Mr Bethwaite said lEL was trying to "grab” NBH “on the cheap” for a fraction of its full value.

North had a market value of $1.2 billion against lEL’s offer of S2SOM. This financial year North plans to invest more than S66M in its Tasmanian operations; SISM in its forest products division, S3IM in the paper division and S2IM in mining and smelting.

The investment will amount to SI.OM a week, making NBH the largest private investor in the state.