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Business

Forum Line heading for sale

By ELLEN STOLZ Loss-making Pacific Forum Line (PFL) is up for sale with another regional shipping service Sofrana leading bidder, New Zealand reports said yesterday. The Fijian Government is one
01 Oct 2012 14:54

No longer a shipping power...the future of Pacific Forum Line is unknown as reports circulate that the company could be soon sold to Sofrana. Photo: Courtesy of PACIFIC FORUM LINE

By ELLEN STOLZ

Loss-making Pacific Forum Line (PFL) is up for sale with another regional shipping service Sofrana leading bidder, New Zealand reports said yesterday.
The Fijian Government is one of the major shareholders of 12 countries which jointly own the Forum Line. New Zealand is another.
No one in Government in Suva likely to be involved in discussions on a sale was immediately available yesterday to comment. But Permanent Secretary for Information Sharon Smith-Jones said she would follow up today.
The New Zealand Sunday Star-Times reported that meetings in Tonga and Fiji are finalising plans to sell the 35-year-old company.
The New Zealand reports said the three majority shareholders, including Fiji, are behind the push to sell, with the board having already signed off on the plans.
Founded in 1978, PFL was intended to encourage economic development in the islands and provide competition to stop monopolies and cartels pushing up prices. Despite once being profitable in recent times it has struggled.
The New Zealand Sunday-Times reported: “PFL has recently financially deteriorated, with losses totalling $14 million in the two years to June 2011.
“Net assets of the line declined to $5.1m by June 2011, and while it is understood performance in the year since has slightly improved, shareholders have been faced with a choice between selling or recapitalising.”
The New Zealand-based Reef shipping group said repeated cutbacks in recent years had led PFL to wither away.
Reef Group director Phillip McNicholl said the market for selling PFL was very limited as the company relied on partnering with other shipping lines – including Sofrana – which would be able to discourage competing bidders.
New Zealand Foreign Affairs Minister Murray McCully said PFL no longer fitted its purpose.
He told the Sunday Star-Times: “PFL was established to fulfil an important need, namely to offer regular shipping services that the private sector was not able to provide in the Pacific.
“Since that time a great deal has changed, to the extent that the PFL no longer fulfils a number of its obligations.”
New Zealand Labour Party foreign affairs spokesperson Phil Goff claimed that small island nations would be severely impacted by a sale.
“We don’t want to end up in a situation where commercial shipping lines can name their own price and leave Pacific countries struggling,” Mr Goff said.




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