Pyne Gould considers British, Australian listings
BUSINESSDESK: Pyne Gould Corp is mulling offers for its Perpetual Trust unit and is looking at listings in Australia and Britain as the final leg of its restructuring under the ownership of George Kerr and Baker Street Capital.
The Christchurch-based company has received approaches from several parties to buy some or all of the Perpetual unit, which consists of corporate and personal trust businesses, and retail asset management, Pyne Gould says.
The company is working with several parties with a view to divesting the unit, but no final deal has been reached.
A related-party loan between a Perpetual fund and a Torchlight fund upset statutory supervisor Trustees Executors, sparking the Financial Markets Authority to investigate the transaction.
The Perpetual divestment is seen as the final leg of Pyne Gould's restructuring under the ownership of Kerr and Baker Street's Australasian Equity Partners No 1 LP. Once that is complete, Pyne Gould will commit capital into its Torchlight unit to invest in and manage distressed assets.
"Torchlight was one of the conditions of my support for the 2009 rights issue" based on the idea that "the hangover from the GFC would be long and painful", Mr Kerr says.
Pyne Gould's strategy means it will have minimual exposure to New Zealand, with obligations to Heartland New Zealand its only assets of substance. This month it wound down its stakes in Heartland and PGG Wrightson.
The Torchlight unit is extending its regional focus to the UK, and Pyne Gould's board has commissioned legal and accounting advisers Baker & McKenzie and Deloitte to "evaluate the opportunity for PGC to list in either or both Australia and the United Kingdom", Mr Kerr says.
The analysis is expected to take "some weeks or months" and Pyne Gould will update the market when it is completed.
"Torchlight is growing by increasing exposure in sectors where banks are reducing exposure. This is a strategy for those with patience".
Mr Kerr says since the 37-cents-per-share takeover was completed in March, Pyne Gould has repaid $22 million of bank debt, built up "substantial cash" and holds about 17% of the limited partnership interests in the Torchlight fund.
"We continue to reinvest in Torchlight Fund No 1 LP and in the development and establishment of other similar Torchlight funds."
The company will release its annual result on August 31. The shares were unchanged at 27 cents in trading today.