Background to BHP Sale of Orbital Holding
27 July 1998
Background to BHP Sale of Orbital Holding
PERTH, Western Australia, July 27 -- Orbital Engine
Corporation would like to provide background information
to BHP's recent sale of approximately 15% of the company. Orbital's largest
shareholder sold 50,260,000 ordinary shares (equivalent to 6,282,500 American
Depository Receipts) on Tuesday, July 21, 1998.
The board and management assure shareholders the BHP sale does not reflect
a change in the underlying commercial activities of the company. Orbital
continues to make sound progress towards the high volume commercialization of
its direct fuel injection technology. The recent announcement of an agreement
signed between Daimler-Benz and Siemens Automotive, as well as long term
supply agreements with Mercury Marine and Bombardier-Rotax are a testament to
the commercial application of the technology. In a public statement earlier
this month, BHP stated "It is obvious in the share market they (Orbital) are
beginning to create some excitement and they are beginning to create value and
they are entering into sound commercial relationships with the likes of
Siemens and Mercedes Benz that quite frankly we find exciting and promising."
It is well recognized throughout the Australian financial markets that BHP
has been involved in a program of selling assets that do not represent a core
investment for a resource company. BHP has raised in excess of A$3 billion
since commencing this program.
Orbital's Chief Financial Officer, Mr. Peter Hatfull said "Due to the
recent history of non-core assets sales, BHP's continued shareholding had
created an overhang in the market place. We believe this sale creates some
much needed liquidity for our stock, which clears the way for an increased
level of institutional holding on our register."
BHP retain a 9.5% holding in Orbital. They have publicly stated "Except
in agreed circumstances, BHP will retain its remaining interest in Orbital for
a period of at least 12 months."