SINGAPORE - Brierley Investments Ltd will use the proceeds from the sale of its Air New Zealand stake to make a strategic move into Southeast Asia's technology markets, according to chief executive officer Greg Terry.
Mr Terry yesterday told CNBC television in Singapore that Brierley would use the $280 million from
the sale of a 16.7 per cent stake in Air NZ to Singapore Airlines to reinvent itself in Asia.
"If we can close this transaction early in May, then fairly soon thereafter, we'll be able to make our first major move in Southeast Asia," he said.
"We have a major partnership with Madrona Investments in Seattle in the technology area in the US, and we're going to bring that to Asia in partnership with some major Asian corporations."
Brierley on Tuesday sold its Air NZ `B' shares to Singapore for $3 each, bringing the Singapore flag carrier's stake in the airline to 25 per cent. Brierley still owns 30 per cent of Air NZ through its restricted `A' shares, which cannot be sold to foreigners.
Mr Terry said Brierley received higher bids for the Air NZ stake, but settled on the Singapore offer in the hope of boosting the value of its `A' shares.
"It was the one that would add the most value to the `A' shares. The average price that we hope to enjoy over the whole stake will be higher by having a strategic buyer of the `B' shares rather than just a financial buyer," he said.
Mr Terry said there was "a very good chance" that Air NZ would boost operating profit 30 per cent by mid-2001, delivering Brierley a further 50c a share in an earn-out clause agreed to by Singapore. It could earn a further 50c a share, taking the total to $4 if Air New Zealand lifted its earnings by 65 per cent.
Air NZ's A shares ended at $1.98, down one cent, while its B shares were up five cents at $2.55.
He said the falling cost of jet fuel and the expected savings of $200 million a year in synergies from its tie-up with Ansett Australia gave the stock "plenty of upside."
Asked about the mediocre performance of Brierley on the Singapore Exchange he said: "I'm not too surprised by that ... The thing I'm pleased about in the trading here in Singapore is that we have got serious liquidity. There's a lot of trading going on."
In late March, Brierley moved its primary listing from New Zealand to Singapore and now has secondary listings in New Zealand, Australia and London.
