SA: Bridgestone asked to buy out Australian shareholders

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SA: Bridgestone asked to buy out Australian shareholders

ADELAIDE, April 29 AAP - Investment executive John Spalvins today asked BridgestoneAustralia (BSAL) to consider a share buy-back plan to buy out its Australian shareholders.

The plan was put forward by investment company Galufo, which owns more than 500,000BSAL shares, at the company's annual general meeting in Adelaide.

Galufo executive chairman, Mr Spalvins read out an open letter to the company at themeeting, in which he was critical of BSAL's financial results, and said major correctiveaction was needed.

"The 2001 financial results achieved by Bridgestone Australia, while an improvementon 2000, still compare unfavourably with those of five years ago," Mr Spalvins told themeeting.

"There is a need for major corrective measures to be taken as a matter of urgency."

BSAL made a net profit of $8.9 million in 2001, up from a $6.9 million loss in 2000.

Mr Spalvins also said the company did not communicate well enough with its shareholdersand that only one of BSAL's seven directors did not have an executive role with the company.

Under Galufo's plan, the company would offer to buy back 14 million shares at $3.50each, in the form of a $1 capital return and fully franked dividends of $2.50.

"This offer would be made to all shareholders, but if Bridgestone Corporation of Japan(60.3 per cent shareholding) declined, it would be possible for all interested Australianshareholders to be taken out for 100 per cent of their shareholdings," Mr Spalvins said.

BSAL executive director of finance Andrew Moffatt said Galufo's share buy-back planwas a matter for the company's directors to consider and they did not have a "definitiveanswer" at this stage.

He said the company was working hard to improve its profitability, but its core businessof tyre manufacture was facing increasing competitive pressures.

"It's a globally competitive industry and we are under very, very high price pressures,"

Mr Moffatt told reporters after the meeting.

"The market is still very competitive because of the many imported Asian tyres, theyhave been increasing dramatically in the last two or three years, competition is gettingmore and more severe," he said.

All of the operations within the group, except for the tyre division, were operatingprofitably, he said.

"We would like to think this year we can make a small profit from the tyre division," he said.

He said overall the company expected to have a financial result "in the order of whatit was last year" for 2002.

The company also announced it would be distributing a fully franked dividend of 7.5cents per ordinary share, the first dividend in two years.

Mr Moffatt also said BSAL was currently looking for another non-executive director,but it would be at least several months until that was finalised.

AAP scl/jmd/sb

KEYWORD: BRIDGESTONE