DNZ Property Fund said it would move to internalise the management of its property portfolio and Paul Duffy will remain chief executive.The issue of the cost of buying out the company's management contract was controversial at a series of investor meeting
DNZ Property Fund said it would move to internalise the management of its property portfolio and Paul Duffy will remain chief executive.
The issue of the cost of buying out the company's management contract was controversial at a series of investor meetings recently.
Mr Duffy is an owner of the management company DNZ Management.
Since a new board was confirmed at a special meeting last week the independent members of the board had unanimously decided to internalise the management structure.
"This allows us to do away with the previous A and B shareholders structure, which is a major impediment to listing the company," chairman Tim Storey said.
He did not say how much it would cost to buy the current manager out. A $35 million plus price tag angered investors at the meetings.
The board will meet again shortly to finalise the terms of internalising the management contract, and discuss details of an equity raising proposal. It expected to update shareholders in the next two weeks.
"We are finalising arrangements with the manager, but the price is considerably below the bottom end of both independent valuations and the price agreed with the manager in November last year," he said.
Mr Storey said current funding would be used to buy out the management contract and the company would continue with its asset sale programme.
He defended the retention of Mr Duffy, citing stability and continuity as reasons, as well as Mr Duffy's property industry knowledge.
The company expected to take a proposal to raise a minimum amount of additional equity to shareholders for endorsement at the annual meeting in late June of early July.
The current trading halt on Unlisted trading platform will stay in place until further notice.
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