By Chris Hutching
Friday 6th June 2003
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The deal was ratified at a recent meeting of shareholders and the former owner of Hirequip, Stuart McKinlay, will become a director of Southern.
Last year Southern Capital bought half of Dunedin-based Hirequip for $17 million from GS Private Equity, an institutional investor that boasted a compound annual return of 35% over the life of the investment (Hirequip is about twice the size of its nearest competitor).
Now, shareholders have approved Southern Capital's plan to buy the other half from founder and Hirequip managing director Stuart McKinlay, funded by the issue of 29.77m shares to the Stuart McKinlay Family Trust at 60c per share.
Following the transaction, on a fully diluted basis, the trust will hold 26.7% of the company and be the largest single shareholder, without having made a formal takeover offer to other shareholders (due to timing of the deal before the new takeovers provisions came into effect).
Mr McKinlay will continue to run the division and the listed company will change its name to Hirequip.
Southern Capital founder Howard Paterson, also of Dunedin, is understood to have been behind the deal as well as the appointment to the board of accountant Trevor Scott of Dunedin.
This week the deal was put into effect with several substantial shareholder notices from Mr McKinlay and the name change is expected soon.
Meanwhile, Mr Wong said the company was formulating a new business plan that would be finalised by the end of July.
There had been market speculation that the property activities would be sold down or placed in a separate investment entity.
However, Mr Wong said the latter option was unlikely at the moment.
Meanwhile, Southern Capital has sold some of its Queenstown properties in Vancouver Drive (an undeveloped block with resource consent) and Frankton Rd (apartments) for a net profit of $1 million.
It has also sold another section at its Omaha development for a record price of $1.035 million.
But its proposed Waimakariri Employment Park and motorway service area near Kaiapoi, north of Christchurch, was rejected by the Environment Court on the petition of neighbours.
Mr Wong said the company had three weeks to decide whether to launch an appeal to the High Court.
The share price has remained steady at recent levels around 66c.
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