Unitholders in The National Property Trust are banding together in an urgent attempt to remove the company's manager, a wholly owned subsidiary of collapsed finance and property company St Laurence.Led by Sir Selwyn Cushing's son David Cushing, a group ho
Unitholders in The National Property Trust are banding together in an urgent attempt to remove the company’s manager, a wholly owned subsidiary of collapsed finance and property company St Laurence.
Led by Sir Selwyn Cushing’s son David Cushing, a group holding more than 10% of NPT units have requested a special meeting and have put forward three resolutions for voting.
Mr Cushing’s H&G limited is joined by THT Properties, Highgate Group, RGH Holdings, Penmaen, Castlemore Investments and Yoyo Nominees in the requisition.
“The current situation is totally unacceptable,” Mr Cushing said in a statement this morning.
“We have been in discussions with many unitholders and there is widespread dissatisfaction with the management of NPT.”
Real estate manager St Laurence was placed into receivership last month, however the receiver has looked to protect the value of the group’s management contracts.
NPT’s management company, St Laurence-owned The National Property Trust Limited, is not in receivership.
Had it been then NPT unitholders might have been able to receive the management contract for free.
At what cost?
On April 30 The National Property Trust Limited referred to a potential sale of the shares in the management company but not the management rights.
NPT has $269 million funds employed and recorded operating earnings of $17.4 million last year.
St Laurence paid $13 million for the NPT management contract in November 2005, according to notes contained in a Northington Partners valuation assessment of DNZ Property Fund’s management agreement.
At the time NPT had property assets of $266 million.
First NZ Capital analyst Jason Lindsay calculated that if NPT paid $8 million to internalise the management contract, then NPT’s gearing would increase to 25.5% from $21.3%.
The company currently has $43 million of bank debt.
Unitholders deserve better
Mr Cushing said the status of the manager, with its parent in receivership, reflected poorly on NPT and “taints the entire vehicle”.
NPT, under the management of St Laurence, had been one of the worst performing listed property trusts for some time, he said, adding that the units continue to trade at a large discount to net asset value.
The units last treaded at 48c compared to the NAV of about 70c.
“The fees paid to the manager and corporate governance are materially out of line with current best market practice,” Mr Cushing said.
“NPT unitholders deserve better than to have a manager controlled by the receiver of St Laurence Limited.”
Proposals
The disgruntled investors have put forward three resolutions to be considered at a special shareholders meeting.
- The National Property Trust limited to be removed as manager of NPT;
- The Trustee to be directed to apply to the Court to request the manager be removed; and
- That the voting percentage of units held by those unitholders not associated with St Laurence Group voting in favour of the first two resolutions, to those unitholders not associated with St Laurence Group voting against the resolutions, be disclosed via the NZX market announcement platform on the following business day from the meeting date.
