The St Laurence owned manager of the National Property Trust, facing a revolt from unitholders, has agreed to surrender its management contract for just NZ$2.5 million and sell its near 16% stake in the listed property trust for about NZ$16.3 million.
(Update adds information on when Deloitte's first receivership report is due).
The National Property Trust Ltd, manager of the National Property Trust, said details of a proposal outlining how it will give up the management rights will be included in the trust's notice of annual meeting which will be sent to unitholders in July. It said the Cushing family, which is among the National Property Trust's bigger shareholders and has led a revolt against the manager, had agreed to support the proposal.
The deal isn't great news for St Laurence's beleaguered investors. The insolvent St Laurence, owing 9,000 investors NZ$245 million, was dumped into receivership by its trustee Perpetual Trust in April. At the time First NZ Capital analyst Jason Lindsay estimated the receivers, Deloitte’s Barry Jordan and David Vance, could reap between NZ$6 million and NZ$10 million from selling the National Property Trust Management contract.
Deloitte's first report on the receivership and an update letter to investors, are both due out next week.
The National Property Trust Ltd relinquishing its management contract comes after David Cushing, son of former Brierley Investments and Air New Zealand chairman Sir Selwyn, secured the backing of the 10% of National Property Trust unitholders needed to call a special meeting, where they aimed to sack the manager.
The National Property Trust Ltd will sell its 31.9 million units in the trust for 51 cents each. They closed at 52c yesterday.
The National Property Trust, whose portfolio includes the AA Centre on Auckland’s Albert Street, the Heinz Wattie’s warehouse in Hastings and Christchurch’s Eastgate Shopping Centre, posted a net loss of NZ$13.2 million in the year to March, down from a loss of NZ$21.3 million the previous year. However, distributable earnings per unit rose to 5.06c from 5.01c.
Read National Property Trust's statement below:
The Manager of The National Property Trust, The National Property Trust Limited, has been developing a proposal under which the management rights held by the Manager will be relinquished, the units held by the Manager and its associated entities will be repurchased, and a company will be formed so that unit holders will exchange their units in the Trust for shares in a company.
Details of that proposal will be included in the Notice of Annual Meeting to be sent to all unit holders early in July 2010.
The proposal, if approved by unit holders, will result in:
- The 31,951,274 units held, or to be issued to, by the Manager and its associated persons being repurchased for 51 cents each;
- The management rights of the Manager being relinquished for a payment of $2.5 million (plus GST) with the Manager and the associated management company transferring all management systems and information to a new entity;
- A company replacing the unit trust with unit holders then holding the same proportionate number of shares that were held in the Trust;
- Application being made to NZX Limited for the shares of that new company to be listed;
The Cushing Family, who are part of a group of unit holders that have requisitioned a special meeting, have advised that they will support the above proposal subject to it binding the Manager and other relevant parties and only being subject to approval of unit holders. In which case they will recommend to the other parties requisitioning the special meeting the withdrawal of the notice to requisition a special meeting.
The indicative timetable to implement the proposal is:
- to obtain approval in principle to the proposal at the Annual Meeting on 30 July 2010;
- to place a full proposal before unit holders at a Special Meeting before 30 November 2010 to obtain approval to implement the final proposal;
- to implement the new structure on 1 April 2011.