Govt. sells shareholding in Leiola Group [1]
Tuesday, September 9, 2008 - 21:00. Updated on Thursday, September 11, 2014 - 16:05.
By Pesi Fonua
The process of privatising government enterprises in Tonga made two steps forward and one step backward in July.
The government sold its remaining 75 per cent shareholding in the Leiola Group Ltd., Tonga's sole Duty Free enterprise, to the Pacific Retail Ltd. for $6.06 million pa'anga; and its 40 per cent shares in the Westpac Bank of Tonga to Westpac for $25 million pa'anga. Then government bought back the national power generation unit from Shoreline Power for $US17.7 million and handed it over to its own company Tonga Power Ltd.
The new shareholders of Leiola are Pacific Retail Ltd. (75%), and Ross Chapman (25%) who took over the operation on July 30.
In a statement the Tonga government said that after four months of public tendering, which attracted interested from as far away as Dubai, India, Australia, New Zealand and Fiji, a local company the Pacific Retail Ltd. was the successful bidder with a tender offer of $TOP6.O6 million. The next highest bidder was $TOP5.4 million
John Paul Chapman, Managing Director of Pacific Retail Ltd., said that he was happy with the purchase as, "it gives us a good mix of retail stores and the ability to grow, our whole company as we move forward.
"We are increasing our staff and social commitment to this country, which is paramount to our long-term strategy in Tonga."
The Pacific Retail Ltd operates three businesses, focusing on office equipment and printing supplies, hardware and construction products and duty free goods.
Kula Fund II
As Pacific Retail Ltd. expanded its operation into the retailing of duty free goods, it has also brought in a partner, the Aureos Capital's Kula Fund II Ltd., which has just acquired a 30% shareholding in Pacific Retail Ltd.
John Paul said that the shareholders of Pacific Retail Ltd. are Pacific Finance 70% and Aureos 30%.
Andrew Crompton, Managing Partner, Kula Fund II Ltd. in a statement released by Aureos said that Pacific Retail Ltd. would, "benefit strongly from the expected growth of the Tongan economy. This growth will be driven by increasing tourism and the commencement of infrastructure projects in Nuku'alofa, Tonga's largest town, and on the island of Vava'u.
"We are pleased to assist PRL in implementing its strategic plan to grow its businesses. This investment accelerates Aureos Kula Fund's strategic initiative to invest in high quality retail businesses, which have the capacity to form a regional retail group in the future."
Ross Chapman, the Chairman of PRL sees Aureos' involvement as a vote of confidence in PRL and "we are pleased to have the fund as a shareholder and financial backer," he said.