Australasian Property on money trail again

By Chris Hutching

Friday 16th November 2001

Listed Australasian Property Holdings managing director Tracey Lake said yesterday that based on previous experience he would expect to raise between $500,000 and $1 million from a capital note issue to existing shareholders.

In keeping with earlier practice, Mr Lake and fellow directors will host a series of shareholder presentations in Christchurch and Wellington ahead of the company's annual meeting in Auckland on Friday, November 30 to ratify the issue promising annual returns of 8% annual returns.

The one-for-10 renouncable issue of convertible cumulative redeemable preference shares at a price of $1 a preference share may prove attractive to faithful shareholders seeking a continuing yield because the company relies on share price appreciation rather than dividend payouts to reward shareholders. The same will be true of the note issue where shareholders who take up their entitlement will be banking on the share price exceeding the redemption price of 20c by the end of 2003.

Unfortunately the share price has sunk from its listing value last year of 24c to 9c - just above net asset backing of 8c. But Mr Lake said he would outline to shareholders why in his opinion the true asset backing is closer to 20c.

Australasian Property Holdings is developing a holiday home/golf resort at Katoomba in the Blue Mountains inland from Sydney with ultimate plans for up to 120 dwellings and a hotel.

The capital notes fundraising will provide working capital for roading and development of the first 12 dwellings priced at around $500,000 each as well as refurbishment of the golf clubrooms.

The money will initially be used to retire some of the $16 million debt which has doubled during the year to June 30 and help pay accounts payable of $837,761. Cash holdings are just $152,393.

During the year a new director, Paul Duffy, was appointed. He is the chief executive of Dominion Funds, a property syndicator associated with the principal of investment advisory network, Money Managers. There has been speculation that the new association may lead to the possibility of deals to list various entities into the listed vehicle but Mr Lake said there were no such deals in the offing at the moment.

The redemption date for the notes is the end of December 2003 when they will be convertible at five fully paid ordinary shares at a price of 20c a share.

A dividend on each CCRPS will be paid at a rate of 8% per annum to be paid on December 31, 2002 and the redemption date.

There are 5000 shareholders, some holding scrip from the company's former existence as listed Petro Taranaki and Leisure Lea Corporation. It has tax losses of about $8.5 million in Australia and $10 million in New Zealand and is controlled by Australian-based major shareholders and directors Tracey Lake and Lawrence Chartres.

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