Bank of South Pacific finalises purchase of Westpac’s Tonga, Samoa and Cook Islands banks; Special Economic Zone agreement in East Sepik; and Santos reportedly buying into P’nyang gas field. Your weekly digest of the latest business news.

Bank of South Pacific has completed the purchase of three of five Westpac Bank’s operations in the Pacific.  BSP Chairman Sir Kostas Constantinou says BSP has bought the banks in Tonga, Samoa and Cook Islands for A$91million (K182 million). He says the planned Vanuatu purchase will not go ahead ‘at this time’ because of the impact of Cyclone Pam. The purchase of Westpac’s Solomon Islands’ operations has also been delayed, as talks with the Central Bank of Solomon Islands are still in progress.

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PBF’s Robert Igara (left) with LR Group’s Ilan Weiss

A heads of agreement to create a multi-billion kina Special Economic Zone in East Sepik Province is expected to be signed shortly. Key investors include the Pacific Balanced Fund (PBF) and the LR Group of Israel. Malaysian oil palm company Kuala Lumpur Kepong (KLK) will partner with the National Government as an equity partner to develop a large scale oil palm project in the SEZ. Trade Minister Richard Maru says Cabinet has gone with KLK after it could not agree to terms with Wilmar International. Other projects include cattle, poultry, rice farming, fresh produce and cocoa.

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Santos is reportedly close to finalising a deal to acquire a 10-15% stake in the P’nyang gas field in Western Province, at an estimated cost of A$300 million. Existing partners Exxon, Oil Search and JX Nippon would sell some of their interests to facilitiate the deal. Preparations for appraisal drilling at P’nyang are anticipated to commence this year.

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Kina Asset Management’s board has announced a dividend payment of two toea per share. Shareholders have also agreed to allow Monian Ltd to lift its shareholding to 25%.

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The Bank of South Pacific’s board of directors has extended the period of the company’s share buyback program. Under the buyback, shareholders are invited to sell up to a maximum of 5000 BSP shares of each registered shareholding.

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Ratings agency Moody’s regards miner St Barbara’s repurchase of an additional US$8 million of debt as credit positive, reducing its total debt servicing by 15%. In a report to investors, Moody’s says: ‘If the company were to maintain its production and cost levels at Simberi (PNG) and its Gwalia mine in Western Australia, we expect that St. Barbara would be in a position to generate about A$40 million of free cash flow each quarter.’

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Meanwhile, a state of disaster has been declared at the tailings dam of the closed Gold Ridge gold mine in Solomon Islands as unseasonal rains continue to fill the dam to dangerously high levels. The gold mine was sold off in April this year to local landowners by  St Barbara for a nominal amount a year after flash flooding forced the mine’s closure.

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Route of the planned Hawaiki cable.

A new trans-Pacific cable linking Australia, New Zealand, Hawaii and Portland in the US is set to be built by the end of 2017. The cable goes via Norfolk Island, and could allow New Caledonia, Fiji, Samoa and American Samoa to link to it. Under a multi-million dollar binding agreement, Hawaiki Cable and SIL Long Term Holdings will join forces to develop and implement the US$300mm cable system which will be based on coherent fibre technology and with designed capacity of over 25 Tbps.

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Mineral Resources Authority Managing Director Phillip Samar has criticised New Guinea Gold, the Canadian developer of the abandoned Sinivit gold mine in East New Britain, for not taking care of the mine site.

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Trade Minister Richard Maru says the distribution of 300 cocoa seedlings free of charge to 40 farmers in East Sepik is designed to encourage more locals into cocoa farming.

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Prince Andrew and Prime Minister, Peter O’Neill

The Duke of York, Prince Andrew, has told participants in the entrepreneur contest Kumul GameChangers they must persevere with ideas and passion to have an impact on the country’s development agenda. Prince Andrew talked to more than 20 potential entrepreneurs, during his trip to Port Moresby to open the South Pacific Games.

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And finally, a heart-warming story from journalist Malum Nalu: ‘I believe in the goodness of humanity. A couple of days ago I lost my tablet in a cab. Tonight, at 9pm, after covering the Games and working in the press room at the stadium, I went to the haus krai of the family of friends from Western Highlands. The guy who was driving the cab, a young educated fellow, and a devout Christian, recognised me as his passenger, says, “Malum, I’ve got your tablet”. Talk about finding the proverbial needle in the haystack! What a blessing!’