3 Oct 2012

PFL losses prompt Tonga selling its stake

3:48 pm on 3 October 2012

The Tongan government says it decided to sell its shares in the Pacific Forum Line because it could no longer afford to pump money into a company that was operating at a loss.

The Samoan government is in the process of acquiring all of the shares in the regional shipping service.

This comes after Samoa invoked its right to acquire the outstanding shares from the 11 other shareholder countries following a bid by New Zealand company, Sofrana, to purchase the PFL.

Tonga's acting Prime Minister, Samiu Vaipulu, says the government decided to sell because the company was not making any money.

"Years ago it used to make dividends to the share-holders, but in quite some time in the past. It would be more beneficial for us not to spend the precious money that we've made on something that's running in a loss."

Tonga's Acting Prime Minister, Samiu Vaipulu.

According to the Pacific Forum Line's 2011 Annual Report, the company lost 5.8 million US dollars in the 2010-2011 financial year.