Trans Tasman proposes capital reorganisation

By Phil Boeyen, ShareChat Business News Editor

Tuesday 20th February 2001

Property investor Trans Tasman Properties (NZSE: TTP) is proposing a capital reorganisation to give minority shareholders a chance to share in its operating surpluses.

Despite posting operating surpluses each year in excess of $20 million, TTP has not paid a dividend since October 1998 because of certain constraints, and says it is unlikely to do so in the near term.

The company says its majority shareholder, SEA Holdings, does not support the payment of dividends, while many other investors remain concerned at the lack of regular distributions.

TTP directors are proposing a scheme whereby the remaining ordinary shares, held by minority interests, and Convertible Capital Notes, will be cancelled and exchanged for secured bonds.

The bonds would bear a 10% annual coupon payable quarterly, and will be redeemed for cash on maturity. SEA Holdings would then become the sole shareholder in the company.

Under the proposal holders of convertible capital notes will be offered a $1.00 secured bond for each $1.00 note, and minority shareholders will get 35 $1.00 secured bonds for every 100 ordinary shares.

"Shareholders will receive 35c in face value for each TTP ordinary share which currently trade at around 19c. Similarly, CCN holders will receive a $1.00 bond for each CCN which currently trade at around 89c," the company says.

The proposal is subject to legal, regulatory and shareholder approvals, and an independent appraisal report will be commissioned on the fairness of the proposal.

Executive chairman, Don Fletcher, says the proposal will provide both shareholder and noteholders with an alternative worthy of consideration.

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