NASFUND supports Air Niugini LINK PNG merger with PNG AIR
NASFUND has announced it supports the proposed deal by Air Niugini’s subsidiary Link PNG to purchase NASFUND’s shareholding in PNG Air.
NASFUND Chief Executive Officer Ian Tarutia says its board has discussed and accepted in principle, Link PNG’s offer.
Mr Tarutia says the board gave its support for the deal based on these reasons, firstly to protect the investment value of its members, secondly no PNG Air citizen staff will lose their job and thirdly for the country’s interest to have one strong airline providing efficient and cost effective services rather than two underperforming carriers.
He says PNG Air has been under immense pressure to remain operational and faces significant risks to survive without shareholder support and the board views the proposed deal as a win-win for all parties involved.
NASFUND hold 39.29 per cent of the total shares on issue and is the largest institutional investor in PNG Air with a total investment of K76 million comprising of K31 million in equity and K45 million as a loan provided to PNG Air as part of rescue packages given between 2016 and 2017 by the major shareholders.
The Fund states it has not received a single dividend payment from PNG Air since its initial investment in 2008 while its share price from the initial float of K1.00 per share has declined to K0.12 toea per share before PNG Air’s suspension from trading on the PNG Stock Exchange.
According to NASFUND’s view, PNG Air is a non-performing, illiquid and non yielding investment for NASFUND.
The completion of the transaction is conditional upon a number of procedural and regulatory approvals including ICCC’s clearance.
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