Injunction sought to halt sale of Terralink

Moves to sell a state-owned enterprise are under threat. JAMES GARDINER reports.

Moves by the receivers of the failed state-owned enterprise Terralink to make a quick sale to a single bidder are under legal threat.

Another would-be buyer of the mapmaking business has filed a claim in the High Court at Auckland seeking an injunction against the sale announced last Friday.

The injunction is being sought by Ocilla Investments of Parnell, but the statement of claim lists its partner as the South African firm GeoSpace International.

Receivers Richard Dale Agnew of Auckland and Gary Traveller of Wellington, both chartered accountants of PricewaterhouseCoopers, are named as first defendants.

NZ Aerial Mapping of Hastings and Animation Research of Dunedin are named as second defendants.

Mr Traveller was the special manager the Government appointed to oversee Terralink last year when it got into financial trouble and went to the cabinet for more money.

On his recommendation, the Government decided against advancing more money and placed the company in receivership, appointing him as receiver.

More than 100 companies expressed interest in buying Terralink, Mr Traveller said, but last Friday he shocked the serious contenders by announcing that he had sold the business to the companies now named as second defendants, without allowing others to conduct due diligence on the company and make final bids.

Only days earlier, Mr Traveller denied it when the Business Herald put it to him that the sale deal had been done.

He said then that due diligence would begin on Friday and joked that if someone had bought it they should send him a cheque.

Asked two days ago whether a move was underway to injunct the sale, Mr Traveller refused to discuss it, as did one of the shareholding ministers, Finance Minister Michael Cullen.

Mr Traveller said last week that the sale to Aerial Mapping and ARL was "an exceptionally good result."

The consortium agreed to buy Terralink on the condition that other bidders would not be given access to the company's books.

Allowing other companies to carry out due diligence would have destroyed much of Terralink's value to the consortium, he said.

He refused to reveal the sale price but said it compared favourably with the indicative bids lodged by others.

However, if reports of a $7 million sale price are correct, it is understood other indicative bidders may well have been able to top the offer - had they been allowed to.

The move to block the sale is expected to be argued in court next Friday.