'Best option' for worst performer

Analysts yesterday descr-
ibed Trans Tasman Properties' capital reorganisation as probably the best option the hamstrung board could get past majority shareholder SEA Holdings.

Many analysts said it was not the best option available to Trans Tasman shareholders but about the only thing SEA Holdings would agree to.

The capital reorganisation effectively privatises the country's worst-performing listed property company.

Minority shareholders have been offered 35 $1 secured bonds for every 100 ordinary shares. The bonds will return 10% a year, payable quarterly, and can be redeemed for cash at maturity on June 27, 2011.

Convertible capital note holders will be offered a $1 secured bond for every $1 note, again returning 10%, payable quarterly, but redeemable for cash at maturity on June 27, 2007.

A statement from the company said the offer was aimed at providing income
distributions for minority shareholders.

But analysts suggested the company could sell off its Australian assets to free up some capital to pay off debt and start making dividend payments to shareholders, though they admitted the option would not have been acceptable to SEA.

The Trans Tasman statement said it had put several options to SEA including the liquidation of part or all of the property portfolio or SEA buying more shares.

SEA said neither option was acceptable.

But the offer may still be attractive to shareholders who bought in within the last year when the share price languished around the 20c mark.

However, analysts said long-term holders who had been holding out in the vain hope some value would be unlocked might not be as receptive to the idea.

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