By Nicholas Bryant
Friday 14th April 2000
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But Trans Tasman managing director Don Fletcher said the money was not for its just announced buyback of convertible capital notes and hinted it may be used to start building its planned office tower in Auckland's Shortland Street.
Trans Tasman has been in a race with AMP Office Trust to get an Auckland office tower under way.
"I would say AMP and Trans Tasman are in the same boat. Until we have our tenants fully signed up we're not going to commence finally on the tower."
A property insider said the delay in announcing a go-ahead by either party stemmed from indecision by two key tenants.
One was accounting firm PricewaterhouseCoopers, which was apparently no longer interested in Trans Tasman's tower but was holding up a start on AMP's building.
The other was a law firm, possibly Simpson Grierson, which was said to be keen about Trans Tasman's building.
Meanwhile, Trans Tasman told the Stock Exchange this week it would be buying back seven million of its convertible capital notes over the next 12 months. The move is designed to repay debt while arresting the company's ailing share price.
Mr Fletcher said the buyback of the company's own equity was one of the best deals in town.
"The company has been accumulating cash and one of its best investments right now in lowering debt is the notes," he said.
The convertible notes are trading at about 75c four years out from maturity when they will be redeemable for $1 each.
Mr Fletcher said the company was aiming to make significant gains on the notes' original face yield of 9.5%, by buying in the 75c range.
"If we can get around 14% yield on the notes plus the difference in cash at maturity our yield could be as high as 19%," Mr Fletcher said.
Last month the company made another substantial writedown on its properties and announced a $5.48 million loss for the year to December 31.
Frustrated shareholders have not been paid any dividends in the past year and most would probably exit the company if they had the opportunity to do so.
The company's share price pricked up slightly this week to 22c on news of the buyback but the new price is still verging on historic lows.
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