Pyne Gould plans to quit NZX for Guernsey bourse

Friday 28th September 2018

Pyne Gould Corp wants to quit the NZX in favour of a listing in Guernsey, where the company is now based.

The board said leaving New Zealand and listing on The International Stock Exchange (TISE) in Guernsey, one of the channel islands off the coast of France, was in the best interests of the firm given the company's domicile and its inability to get a waiver for Grant Thornton NZ to act as auditor.

Pyne Gould director Russell Naylor said in the annual report that TISE would "provide a more liquid market for PGC’s shares and access to a wider pool of potential investors. This will make it easier for shareholders to sell shares.

"We will provide additional updates on this as we progress this initiative."

Pyne Gould's auditor Grant Thornton NZ resigned in July after a waiver from the Guernsey regulator expired, and was replaced by Grant Thornton Guernsey to meet the local law.

The firm has had a checkered history with its auditors, and is onto its fourth firm since 2012, when KPMG quit over a disagreement with shareholder George Kerr over whether some related party transactions needed disclosing. Later Grant Thornton NZ took over the audit from PwC.

PGC is blaming a slow handover for the late filing of accounts that has attracted censures from the stock exchange.

Pyne Gould listed on the NZX in 2004, saying it wanted to boost liquidity for its shareholders in a transparent market. At the time it had 2,000 shareholders, more than three-quarters of whom were from Canterbury. Its businesses consisted of the rural services unit Pyne Gould Guinness (which later merged with Wrightson), Marac Finance and Perpetual Trust.

The company is now controlled by Kerr, whose great-great-grandfather founded Pyne & Co. Of its 1,434 shareholders, 1,395 are New Zealanders.

Pyne Gould has gone through a radical change in the wake of the global financial crisis, spinning out Marac to form the listed bank, Heartland Bank, and creating a Torchlight entity to make long-term investments when prices were depressed, including ring-fencing distressed assets. Its largest investment currently is in RCL, which has a series of property development projects in Queenstown and Australia.

Naylor said the company is in a position to return capital to shareholders and would probably use share buybacks to do so. On-market transactions made more sense because the shares trade below Pyne Gould's net asset value, while off-market buybacks will probably be used in larger events, he said.

Pyne Gould's short-term focus is finishing the sale of what it says are non-core assets. That includes earn-outs it might be entitled to from its 2013 sale of Perpetual Trust. The company resumed litigation against Perpetual Trust's buyer, claiming to be owed $22 million. The transaction included a potential earnout in the event of a listing.

The shares were unchanged at 33 cents.

(BusinessDesk)

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