Update: 10:49AM FOSTERS Group Pacific (FGP) was not yielding enough returns for Fijian Holdings Limited, which resulted in the latter divesting its 29 per cent shares in the alcohol making company.
Considered a blue-chip stock on the South Pacific Stock Exchange, FGP however, according to FHL managing director, Sereana Qoro was yielding only 3.3 per cent or $1.1m a year.
She explained that the benchmark for FHL investments was a rate of return of 11 per cent.
FHL had made an investment of $3m for the purchase of the shares and earned a net income of $36.3m when it sold the shares.
Mrs Qoro denied the sale was to secure funds for the purchase of BP Southwest Pacific Limited.
In May, when she announced the sale of shares, Mrs Qoro said it was to allow FHL to be free to re-invest funds in new opportunities.
On Friday, she said the sale allowed FHL to rid of all its debts and had $16m sitting in the bank earning interest of about $1m annually.
"Your money - $16m is sitting there in the bank and earning an interest of $1m and we did not have to sell beer to get that," Mrs Qoro told FHL shareholders at the annual general meeting on Friday.
She added that FHL would have still made a profit even if the FGP shares were not sold.
FHL made a gross profit of $39m against $7.3m in 2008.
If the income from FGP shares sale is deducted, the profit thus would have been about $2.6m.
