Reiher: Prohibition on foreign investment in any form

Caption: Air Niugini Chairman Sir Frederick Reiher

By MATTHEW VARI

Sunday, October 19, 2014 (Sunday Chronicle, PNG)

AIR Niugini board Chairman Sir Frederick Reiher made the comments in regards to the partial privatization of the national flag carrier and the requirement to privatize shares to local investors and citizens.

He pointed out the key aspects of the ownership restructure program the national government has committed to, which will be implemented upon the passage of the enabling legislation by the national parliament.

The State will retain 51 percent equity in the airline, with a 49 percent stake to be traded as shares to the private sector and citizens.

“A transparent process to invite private sector shareholding will take place when the legislation is passed,” Sir Reiher said.

“The legislation will set out clearly the conditions of any private shareholding, and they will indicate an absolute guarantee that only Papua New Guinean institutions, companies, and individuals will be allowed to take up shares in Air Niugini Limited.”

“There will be a specific prohibition on foreign investment in any form, and two-thirds of the board of the restructured company must be citizens of Papua New Guinea, including the positions of chairman, and the deputy chair.”

The chairman said that the restructure of the company will reduce the airline’s reliance on the state, which means a lessened burden on taxpayers of PNG for capital injections and loan guarantees.

“In the immediate future as the management has briefed the unions- significant expenditure on aircraft re-fleeting, on infrastructure and other important areas including maintenance facilities- principally the new hanger that we need to have will be required,” Reiher said.

“The injection of private sector capital and expertise will help ensure that this expenditure is sound and does not reduce the airline’s financial stability.”

“As ANG celebrates 41 successful years in one of the world’s most challenging industries- it will undergo an important restructuring, in terms of capital and capacity that will help secure its future and will see to the maintenance of high quality, safe and affordable air services as the national flag carrier.”