Business

Forum Line losses prompt Tonga selling its stake

Source: RNZI Nuku’alofa: The Tongan government says it decided to sell its shares in the Pacific Forum Line because it could no longer afford to pump money into a company
04 Oct 2012 08:24

Source: RNZI

Nuku’alofa: The Tongan government says it decided to sell its shares in the Pacific Forum Line because it could no longer afford to pump money into a company that was operating at a loss.
The Samoan government is in the process of acquiring all of the shares in the regional shipping service.
This comes after Samoa invoked its right to acquire the outstanding shares from the 11 other shareholder countries following a bid by New Zealand company, Sofrana, to purchase the PFL.
Fiji is also a major shareholder in the Pacific Forum Line.
Tonga’s acting Prime Minister, Samiu Vaipulu, said the government decided to sell because the company was not making any money.
“Years ago it used to make dividends to the share-holders, but in quite some time in the past,” he said.
“It would be more beneficial for us not to spend the precious money that we’ve made on something that’s running in a loss.”
According to the Pacific Forum Line’s 2011 Annual Report, the company lost US$5.8 million in the 2010-2011 financial year.
The Samoan government, which was an eight per cent shareholder in the company, had signed on to acquire the remaining 92 per cent.
Founded in 1978, Pacific Forum Line was intended to encourage economic development in the islands and provide competition to stop monopolies and cartels pushing up prices.




Subscribe to E-Edition
pacific island top up
Air Nuigini
Subscribe-to-Newspaper
Fiji Sun Instagram
Fiji Plus
Subscribe-to-Newspaper
error: