BIL 'close' to selling stake to Singapore

By GEOFF SENESCALL

Brierley Investments is still close to selling shares in Air New Zealand to Singapore Airlines, says Brierley chief Greg Terry.

"We are not far apart," he said to a question about Singapore at a special Air New Zealand shareholders meeting in Auckland. The meeting approved buying the remaining 50 per cent stake in Ansett Australia.

"I think the chances are quite good the transaction will be done. The devil is in the details in these things. Everybody has got to be comfortable about it."

Mr Terry said the decision to suspend sale talks late last month until the Ansett deal was completed was due to intense media speculation about what Brierley intended doing with its 47 per cent shareholding.

He told shareholders he expected the Ansett transaction, which still needed regulatory approval, to be completed by the end of April or early May.

Mr Terry would not comment to the Business Herald on whether Brierley intended lifting its holding in Air New Zealand B shares so it could deliver a 25 per cent shareholding to Singapore.

Brierley holds 17 per cent of Air New Zealand through the unrestricted B shares, which foreigners can own. Speculation as to the stumbling block to talks with Singapore has focused on the delivery of extra shares to make up a 25 per cent shareholding in Air New Zealand.

Questioned about price, Mr Terry said: "I think there are all sorts of higher prices out there ... and not just from Qantas ... That is not the issue.

"The issue is, if we are going to remain a 30 per cent shareholder in this airline, which of the available transactions, if we do indeed decide to do one, will give us the best benefit on our remaining stake - on the value of the A shares." That was the crucial issue from the point of view of investment and the airline's future.

The positive comments about Singapore were conspicuously absent when it came to the subject of Qantas, whose chief executive, James Strong, made public his interest in buying into Air New Zealand last week.

Certainly, Brierley and Air New Zealand chairman Sir Selwyn Cushing baldly indicated a preference to a deal with Singapore when asked about Qantas.

"That is the most favoured outcome, if only to take advantage of the huge opportunity in Ansett Australia and also to give enormous strength to Air New Zealand and Ansett going forward," he said.

"With Singapore's participation, they come in from the East. It is a very strong airline.

"It would not be for me to say that other people from Australia have perceived that too."

Sir Selwyn had also read of a proposition from Mr Strong for Air New Zealand to operate regionally but had no idea what this involved.

The gathering displayed little of the ill-sentiment that dogged the previous annual meeting. This time Sir Selwyn would not be baited by shareholders' rights campaigner Max Gunn, who saw this as just another deal where Brierley delivered a New Zealand firm into foreign hands.

Sir Selwyn gave a lengthy reassurance at the start of the meeting that his chairmanship of Air New Zealand and Brierley did not amount to a conflict of interest. All four resolutions were passed with little opposition.

Air New Zealand A shares gained 11c to close at 199c yesterday, the Bs rose 12c to 250c. Brierley lost 3c to 36c locally.