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Not for sale

By Chris Hutching

Friday 14th March 2003

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Pacifica Transport Group executive director Rod Grout said yesterday there was no substance to a report mid-week that the company is being eyed for purchase by Wellington's CentrePort ­ in fact the owners announced on Tuesday that the shipping company was no longer for sale after indicative bids failed to meet its expectations.

Mr Grout said he was at a loss to understand how the newspaper had got it so wrong. Pacifica Transport is the largest New Zealand shipping group, employing 250 people.

It is owned by Dunedin-based Skeggs Group, which invited expressions of interest for Pacifica late last year, after an approach by a prospective buyer.

The directors deemed that shipping was no longer considered a "core" activity even though Pacifica Shipping (1985) has plied coastal trade for more than two decades and is also involved in storage and distribution.

Mr Grout declined to comment on the changes that may lie ahead at the shipping line as it struggles against competition from foreign-owned services that enjoy freedom from ACC levies, New Zealand taxes, and other legislative requirements affecting New Zealand employers.

He said the actions of foreign vessels was akin to "dumping" excess capacity in this country and was also affecting Tranz Rail profitability significantly. Law reform in 1994 paved the way for foreign vessels to ply coastal trade in a move that local shippers said would tip the balance sharply in favour of overseas operators.

Mr Grout said Pacifica offered a more regular service and a two-way service. But the foreign operators undercut local companies on the north-south trade route.

He predicted the balance would tip further in favour of overseas shippers because of new taxes arising from the Kyoto protocol that would be imposed on local companies.

The one encouraging sign on the horizon was the Labour government's recently unveiled transport strategy in the form of the Road Traffic Reduction Bill, which will consider integrating rail, air and road transport with an emphasis on using rail and coastal shipping, he said.

Among the suitors for Pacifica were CentrePoint, and Mainfreight and Owens Group.

Pacifica Shipping is part of the Skeggs Group founded by Sir Clifford Skeggs and its directors include his sons Bryan (who runs the seafood operations of the group), Graeme (a surgeon), and financial controller, David, plus two independent directors, Mr Grout and Ian Farrant.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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