PGC's Torchlight sells down Heartland stake in $4.9m sale

BUSINESSDESK: Pyne Gould Corp subsidiary Torchlight Securities sold down its stake in lender Heartland New Zealand for $4.9 million in an on-market sale.

The Torchlight unit, which holds Pyne Gould's shares in Heartland and PGG Wrightson, sold 9.4m shares, or 2.4% of the financial services firm, according to a substantial shareholder's notice.

The sale takes Torchlight's stake in Heartland down to 9.8% from 12.2%.

The shares sold at 52 cents apiece, according to NZX data, and Heartland's stock fell 3.9% to 50 cents today.

Heartland is rated "outperform", according to a consensus of two analysts compiled by Reuters, with a target price of 60 cents.

In March, Pyne Gould cut its stake in Wrightson to 7%, while at the same time building its investment in Heartland by the same amount.

Earlier this month, the Financial Markets Authority said it was looking into Pyne Gould’s related party transactions, which along with complaints about the wealth manager's governance, prompted auditor KPMG to quit its role with the company.

The auditor's resignation came a week after managing director John Duncan expectedly stepped down after joining Pyne Gould in 2009 from a 15-year career with Macquarie Group.

Businessman George Kerr replaced Duncan with immediate effect, having taken control of Pyne Gould via his Australasian Equity Partners No 1 LP (AEP) venture with US hedge fund Baker Street Capital.

Mr Kerr became involved in Pyne Gould in 2009, taking a cornerstone stake after the company faced large writedowns on the value of its Marac finance unit's property loan book, which has since been divested.

Since his involvement, Pyne Gould has taken stakes in the Kerr-managed Torchlight funds, which specialise in squeezing value out of distressed assets, and its board approved increasing the capital available to Torchlight to “seek modest investments beyond the Torchlight fund”.

Pyne Gould's shares were unchanged at 31 cents in trading today, valuing the company at $67.2m.

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Again watch this space it is all beginning to unfold.


Oh so prophetic! What is to unfold?


i agree with this opinions:Businessman George Kerr replaced Duncan with immediate effect, having taken control of Pyne Gould via his Australasian Equity Partners No 1 LP (AEP) venture with US hedge fund Baker Street Capital.<a href="">kartu kredit bca</a>


The conspiracy theorist in me thinks that PGC bought Kerr's Heartland's shares via an intermediary (maybe even a broker), and that this is one of the transactions KPMG was uncomfortable with. PGC of course denied it bought them from Kerr, which might have been technically true but in substance misleading as they were still Kerr's shares. Duncan, uncomfortable with this, resigns...

Subsequently, under pressure from the FMA and KPMG to disclose or unwind the transaction, PGC exits those Heartland shares only 2 months later...

Why else would PGC be selling again so quickly after buying? And if they made a gain from this, surely they are 'traders' given the number of transactions they have completed lately. In which case the IRD should be monitoring them very closely (given they should have lost their losses in the Kerr takeover) for capital gains tax payable.

Perhaps the NBR can invetigate further, by trying to track down the trader who acted as the intermediary...


And if that was the case, would PGC be breaching the 'financial assistance' rules...i.e buying shares (effectively) off Kerr to help him in return fund his Takeover of PGC...


and whilst you're at it have a look at the shonky trades in IEF.AX between Aug 2010 and March 2011, where 90mill of shares owned by Pyne FT at 9 cents ended up being bought by Torchlight LP 1 for 12 cents, after some very clumsy attempts to make it look like non-related party transactions. The share price manipulation was quite outstanding - it never ever traded at 12 cents other than on the three days the shares were passed on. After that, the share price collapsed again to around 5 cents. Who pocketed the profits?


Maybe they were trying to shift around tax losses by creating assessable gains in Australia and a higher tax base in NZ? (i.e. moving losses from Aussie to NZ). Would have thought the relevant NZ AND AUS tax collection organisations would be able to sniff that out a mile away...?

Or was it to try and create a performance fee for themselves by manipulating the share price?

Nothing is as it seems with this company.


I have a Theory - Heartland applied pressure to get rid of and clear of George Kerr and the wider PGC stable, in the hope of improving their chances of getting the Banking licence. Tourchlight of course happy to have the cash.

This divorce will definately help but I think the Heartland boys have a long way to go to get the sought after licence - probably 5-10 years away.


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