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National Mail quits distribution

By Phil Boeyen, ShareChat Business News Editor

Monday 11th December 2000

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Listed postal company National Mail (NZSE: NML) is closing down its mail distribution operations from the end of next week due to unacceptable trading losses.

Chairman Richard Flower says the company is taking prudent action to minimise further erosion of shareholder funds while the board continues to evaluate the company's future options.

Mr Flower says the board had received advice from Deloitte Touche Tohmatsu which included a detailed financial analysis of options available to the company, based on a number of financial projections.

"The directors have carefully considered this advice and worked through the identified options, including a sale of the company or its mail operations to an entity with allied business interests. This prospect would continue to be actively pursued."

"We believe National Mail is a viable business to such a purchaser, but talks with potential local and overseas investors have not produced a firm proposition for the board to consider."

National Mail employs nearly 200 people in its main offices in Auckland and Wellington and the company says those entitled to redundancy packages will receive formal offers from the company, while all staff will be helped to find new employment.

The company raised $12.7 million in its share float earlier this year, with shares issued at $1.25 and has around 500 shareholders.

The financial statements for the year ended September are due to be released as soon as they are modified to reflect the decision to cease the mail distribution business.

"I feel we have made a responsible decision in ceasing the mail distribution operation, and we will make further announcements in due course," says Mr Flower.

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