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Transcript of interview of Tony Sheperd,
CEO of Transfield Project Development,
On the Acquisition of ADI, Ltd. |
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(Source : ADI Ltd.)
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MICHAEL JEFFREYS - PRESENTER:
Now, ADI, that's Australia's leading defence industry company, is going to be sold to a French-Australian joint venture. The most likely buyers are a consortium of Transfield Holdings and a French aerospace company, Thomson CSF. Now, the chief executive officer of Transfield Development Projects, Tony Shepherd, is on the line. Good afternoon.
TONY SHEPHERD - TRANSFIELD:
Good afternoon Mike.
JEFFREYS:
I can s... I'm sure you can see the concern here that ADI, a defence industry company … the leading defence industry company in Australia, being half owned by a French company. Don't you see potential conflicts there?
SHEPHERD:
Not really Mike. I think the essential ingredients these days in defence is access to technology. And through Thomson, which is the third largest defence electronics company in the world, we will have access to, you know, leading edge European technology and I think this is essential to the growth, if not the survival of ADI.
JEFFREYS:
Well, what about leading edge American technology? Stephen Martin, who's Labor's defence spokesman, says that's likely to be a problem. What do you think?
SHEPHERD:
Well, we have in fact already entered into arrangements with some of the leading US defence contractors that should we succeed in the acquisition of ADI we will have access to those companies. Companies such as Raytheon which is I think the second largest defence contractor in the world, and Computer Sciences Corporation of America have agreed that should Transfield and Thomson be successful they would be happy to cooperate with us in the future on major defence contracts in Australia. I should also add that Thomson recently, in joint venture with Raytheon, was awarded a major contract by NATO for a command and control system. So, we are quite committed to accessing the best technology in the world, whether it be European or the United States.
JEFFREYS:
So, let's be clear about this though. Thomson CSF, according to the story in front of me here, is partly owned by the French government.
SHEPHERD:
Yes. They have a minority share in the company. It's a listed vehicle … a listed company and I believe by the time this transaction goes through the French government ownership will be down to twenty per cent so it will be, you know, basically eighty per cent owned by private … by the public.
JEFFREYS:
But not to put too fine a point on it is the French government's shareholding there so that the French government can see a return on their money or so they can keep an in and know what's going on?
SHEPHERD: I think that the French government has worked very cooperatively with industry in the past in growing the French industrial base but fundamentally, I mean, they will have no effective control over this business going forward. And, of course, in the (laughs) terms of ADI, I mean, we're a fifty per cent partner here and nobody ever accuses Transfield of being a silent partner on anything.
JEFFREYS:
Mm. I just down the track see a situation … I don't imagine that we are necessarily going to fall out with the French in a major way. Although the French do have a history of being idiosyncratic and inclined to go their own way. But supposing there's a chilling of relations between the French and the Americans - doesn't that put us in a tricky situation?
SHEPHERD:
I don't think it makes any difference at all. I mean, Australia's got to cut its own path going forward in everything it does. It shouldn't be regarded as the fifty-first state of America.
JEFFREYS:
But if we're cutting our own path why isn't this being sold to a local company?
SHEPHERD:
Well, it is being sold to a local company in Transfield who is going to half a share and half the say.
JEFFREYS:
A half share.
SHEPHERD:
And we're bringing in a European company which is highly successful and, you know, candidly I mean, it is virtually the only way that ADI can survive and prosper is by having access to a company that can provide this sort of technology.
JEFFREYS:
I was talking to Kim Beazley earlier on. He was raising an eyebrow about the amount of money quoted in the media - two hundred and twenty-five million. Is that in the ball park?
SHEPHERD:
No, look, I can't comment on that Mike. The deal is still one of preferred tenderer and until the final sales contract is signed I'm prohibited from commenting on the price.
JEFFREYS:
Well, I can understand your position but you can also understand mine in asking because there would be considerable public interest if the government were in fact hoping for four or five hundred million and they're getting about two hundred million.
SHEPHERD:
Yeah, look, I honestly Mike can't be led on that and I can understand your interest and I can sympathise with you but I can't be led on that issue. But I can say that I think this is the best thing that could possibly happen to ADI. You've got two companies that are dedicated to investing in it, bringing in technology, bringing in people, growing it as a company which is internationally competitive and I think it's the best answer for Australia.
JEFFREYS:
All right, finally then on a positive note it is, I believe, mandatory in the contract that no jobs are lost and that operations at Bendigo, Lithgow, Newcastle and Albury all continue.
SHEPHERD:
Yes. We are maintaining all of the regional operations. All of those businesses in fact are quite successful and we can't see any reason for winding them back. Some of them like the Benalla facility is an outstanding facility and we think there's prospects for in fact increasing the turnover of the business there.
JEFFREYS:
So, when will this be a done deal?
SHEPHERD:
Well, we are under a … under a lot of time pressure from the Commonwealth to close the deal and we're hoping that it can be done within the next, you know, six to eight weeks.
JEFFREYS:
So, we should have more of this story by then?
SHEPHERD:
Definitely.
JEFFREYS:
All right, sir, thanks for your time.
SHEPHERD:
Thank you Mike. Bye.
JEFFREYS:
Bye bye. Tony Shepherd who's the CEO of Transfield Development and their half of the likely successful tenderers for ADI. How does that sound to you? How does that sit with you? A French company that's twenty per cent owned by the French government. CSF Thomson, are the other partners in this.
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