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Sealaska Corp. facing tough financial year

Posted: Wednesday, December 27, 2000

ANCHORAGE (AP) -- It has been a difficult year for Juneau-based Sealaska Corp. The regional Native corporation is expected to report significant losses for the first time in 17 years of operations.

Sealaska President and chief executive officer Robert Loescher cited the volatility on Wall Street and two disappointing business ventures in plastics manufacture and limestone mining.

But Loescher told shareholders recently that Sealaska was dealing with the problems head on, and that the corporation should see some growth and progress in coming years.

Sealaska is banking on its new wireless telecommunications and casino investments to brighten the company's financial outlook.

Sealaska recently teamed with two other Native corporations to form Alaska Native Wireless, which is bidding on wireless telephone licenses auctioned by the Federal Communications Commission.

The licenses will allow wireless providers the ability to expand service nationwide by 40 percent, Sealaska said.

Last week, Alaska Native Wireless, which partnered with AT&T and two investment firms, bid $2 billion for the licenses. Winning bidders are expected to be announced next month.

''We wouldn't be bidding if we hadn't committed ourselves,'' Loescher said. ''This is probably one of the most exciting and dynamic industries there is.''

Sealaska also recently invested in a $180 million casino near Escondido, Calif., on land owned by the San Pasqual Indians. The project involves the San Pasquals, Sealaska and the Tunica-Biloxi tribe in Louisiana.

Although Loescher has been a critic of Indian gaming in the past, he said the investment is good business.

''We still have to take care of the behavioral aspects of gambling but as an entertainment industry it's here to stay and we might as well provide a quality experience,'' he told the Anchorage Daily News.

Loescher, meantime, didn't put a dollar amount on this year's red ink.

Despite the losses, Sealaska paid $3.3 million in dividends this month to its 16,500 shareholders. That brought the year's total to $8 million, the company said.

Sealaska reported a $10 million profit on revenue of $176 million last year. That came mostly from its stock and bond portfolio and from logging in Alaska's Southeast.

Sealaska was formed under the 1971 Alaska Native Claims Settlement Act. It long has been a regional powerhouse, pumping more than $223 million into the pockets of Native shareholders statewide since its inception as part of ANCSA's profit-sharing requirement.

Although it intends to continue logging its forests, the company has been trying to diversify away from natural resources and tap growth sectors of the economy.

Sealaska has made forays into mining, plastics, telecommunications and gaming over the past few years.

But two of the four investments haven't paid off.

A ''for sale'' sign is going up on TriQuest Precision Plastics, a Vancouver, Wash.-based subsidiary that makes injection-molded plastic components at factories in Mexico. Sealaska became majority owner in December 1997.

Sealaska also is trying to sell TriQuest-Puget Plastics, a new joint venture with Arctic Slope Regional Corp., the regional Native corporation based in Barrow.

Sealaska also plans to sell SeaCal, a limestone company it started in August of 1998 on Prince of Wales Island, 150 miles southwest of Juneau.

Although SeaCal produces a quality product, it has not found customers quickly enough, Loescher said.



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