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By Thomas Kilala

PORT MORESBY, Papua New Guinea (February 21, 2001 - The National/PINA Nius Online)---The management boards of the Credit Corporation and the Bank of South Pacific have agreed in principle to merge the two entities in the next eight months.

At a joint press conference held at the Park Royal Hotel yesterday, following the board meetings of Credit Corporation and the Bank of South Pacific, the respective chairmen, Sir Henry ToRobert and Noreo Beangke, announced that the K 116 million (US$ 34.8 million) merger plan will begin becoming effective today.

Credit Corporation has net assets worth K 52 million (US$ 15.6 million) while BSP's assets total K 64 million (19.2 million), bringing the merger value to K 116 million (US$ 34.8 million).

"The boards of our two organisations unanimously voted, subject to all necessary statutory and regulatory approvals, to merge the two companies to form a nationally owned entity under the Bank of South Pacific Limited," Sir Henry and Mr. Beangke said in a statement.

The proposed merger is subject to the Bank of Papua New Guinea's approval, which will be formally sought after both companies follow a rigid process of due diligence using third parties to ensure that the mandatory requirements of transparency, objectivity and accountability are upheld.

"Additionally, the 75 percent shareholders of both companies who are also eligible to vote will need to approve the proposal by a special resolution," the two chairmen said.

The boards and executive managements of both companies believe it is in the long-term interests of the shareholders and the depositors of both organisations that this strategic partnership is formed through an amalgamation.

"The amalgamation will protect the existing 25.748 percent shareholding of Credit Corporation in the Bank of South Pacific. "It will unlock considerable capital, which will enable BSP to achieve its potential for profitable growth by competing more vigorously in an increasingly competitive environment," Credit Corporation chairman Mr. ToRobert said.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

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