Vesteys scrap plan for Australian float

UNION International, the main trading company of the Vestey family, has been forced to abandon plans to float off its Far Eastern meat businesses in Australia, after the collapse of its New Zealand subsidiary, writes David Hellier.

Terry Robinson, Union's chief executive, says that the flotation, on which he has been working for several weeks, will now be 'put on hold'.

On Friday the New Zealand business, the country's fourth largest meat processor and exporter, ceased trading. Its bankers have appointed a receiver.

Mr Robinson blamed the postponed flotation on a poor market for new issues. Other planned share issues had also been pulled, he said.

The decision, however, may upset Mr Robinson's plans to halve Union's debts to around pounds 100m by the end of the year, when Union's standstill arrangement with its bankers expires and has to be restructured.

Mr Robinson's contract expires at the end of the year and his departure package, rumoured to be worth a maximum of around pounds 14m, depends on Union'sdebt and assets.

Since joining the company three years ago, he has cut debts from more than pounds 400m to around pounds 200m.

The company was unable to obtain short term financing to shore up its loss-making New Zealand business. The closure, with the loss of 3,500 jobs, ends the Vestey family's almost a century-old link with the country's meat industry.