DNZ Property Fund has announced it will be paying $35 million to buy its recently retired director Alistair Hassell and current chief executive Paul Duffy out of their management contract.
The decision was reached after consultation with its board voting
DNZ Property Fund has announced it will be paying $35 million to buy its recently retired director Alistair Hassell and current chief executive Paul Duffy out of their management contract.
The decision was reached after consultation with its board voting unanimously to the $35 million figure.
This is down from the originally proposed $42 million that had shareholders outraged in November.
Mr Duffy and Mr Hassell will pocket $12.5 million each in cash from the new deal, with $10 million to be reinvested in the company. Mr Duffy will remain CEO.
Chairman Tim Storey admitted it was a large amount of money.
“It’s still a significant sum but it is at a level that will ensure real benefits to shareholders. We have also discussed this with MMG Advisory Partners and members of the Money Managers Action Group,” Mr Storey said.
“Both groups agree we have to move the company forward to begin restoring value. On that basis they accept the management contract has to be bought out and the management function internalised and they have indicated their support for the terms the independent directors have negotiated.”
With the management contract now internalised, there will only be one class of shareholders. Mr Storey said this meant it could list sooner.
“Internalising the contract and adopting a new constitution means we will no longer have two classes of shareholder, removing a significant impediment to any listing plans,” Mr Storey said.
The company is due to soon announce the date of its annual meeting to be held in Auckland.
