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Pyne Gould completes Heartland exit in $7.9M sale

Friday 20th July 2012

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Pyne Gould Corp, whose Perpetual Trust unit is being investigated by the market watchdog, completed its exit from lender Heartland New Zealand, selling the rest of its stake for $7.9 million.

The Christchurch-based firm sold 15.2 million shares at 52 cents apiece, and will use the funds for "further investment," it said in a statement. Last week, Pyne Gould sold $25.4 million of stock in Heartland and PGG Wrightson to repay $22 million in bank debt, with the remainder tagged for other investments.

The sale means Pyne Gould has cashed in some $24.2 million of Heartland stock since building its stake to just above 12 percent in March.

The firm spent $18.4 million lifting its stake in the lender this year, having underwritten part of Heartland's $35 million share purchase plan and made a $10 million placement.

Heartland's shares were unchanged at 58 cents after the market opened.

Pyne Gould is expected to give a strategy update today having flagged one for this week.

The adequacy of Pyne Gould's disclosure has come under scrutiny in recent weeks after the Financial Markets Authority looked into Perpetual's $28 million of loans to the Torchlight Fund No 1 LP, which is managed by George Kerr.

Pyne Gould said the share sales aren't required to cover the outstanding balance of the loan between the Torchlight fund and the Perpetual Cash Management Fund, which Torchlight said will be prepaid by the end of July.

Perpetual froze repayments out of its mortgage fund last week after a surge of redemption requests, and the cash management fund has been ordered to install two independent observers pending a substantive court hearing next month.

The shares were unchanged at 27 cents, valuing the company at $58.5 million.

BusinessDesk.co.nz

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