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$70m offer

Elenoa Baselala
Wednesday, May 16, 2012

FIJI wants an independent valuer to determine what Air Pacific is worth, saying the $70million offer for Qantas shares was too high.

"It's not worth what they are saying, we have to go to an independent valuer," Civil Aviation Minister Aiyaz Sayed-Khaiyum said in a press conference on Monday.

Mr Sayed-Khaiyum said they did not believe the airline was worth that much in 2010, considering that it had made a loss of $93m during that financial period.

He revealed there have been correspondences between government and Qantas on the sale of the Australian airline's 46.3 per cent stake in Air Pacific.

On May 17, 2010, Qantas chief executive Allan Joyce wrote to Prime Minister Commodore Voreqe Bainimarama with a proposal on the sale of the airline's 46.3 per cent stake in Air Pacific.

The proposal included a valuation by Lonergen Edwards Expert Valuation, which found that Qantas' stake in Air Pacific was worth $67m-$76m and that Air Pacific was worth between $145m-$165m.

Qantas proposed the sale of its shares at $70m based on the value of Air Pacific at $151m.

Mr Sayed-Khaiyum replied to Mr Joyce's letter almost a year later on April 13, 2011, asking the airline to confirm whether the proposal was still current or alternatively submit a revised proposal which took into account the financial position of Air Pacific.

Mr Joyce confirmed on April 14 that it was still current.

Under the Articles of Association of Air Pacific, the sale of any shares must be first offered to the government, which has 51 per cent stake in the airline. An arbitrator will be appointed if the government agreed on the purchase but not on the price of shares.

The appointment of an arbitrator is also now an issue for the two parties.

Qantas has suggested an independent arbitrator based in London, the government however wants the airline to first "engage" in the sale of shares believing that it has not with its proposal.

"You must first formally engage the parties before you agree...," Mr Sayed-Khaiyum said.

Questions have been sent to Qantas in regards to the issue.





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