Thursday 13th November 2003
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INGPT would then likely become the third largest property fund listed on the New Zealand Exchange.
INGPT has entered agreements to acquire a portfolio of 71 buildings owned by two superannuation funds, as well as to buy ANZ House in Auckland's Domain Centre office park from Symphony Group.
It is proposed that the portfolio properties in Auckland, Wellington and Christchurch owned by MFL Mutual Fund and SIL Mutual Fund be acquired for $282.7 million, to be paid for by the issue to the Funds of 182 million units in INGPT at $1.00 per unit and $100.7 million in cash. The acquisition of ANZ House will cost $21.5 million, to be funded by the issue of up to 15 million units in INGPT and debt finance.
Over time, INGPT plans to sell a number of the smaller and lower value properties to be acquired from the Funds in a phased rationalisation programme aimed at optimising the ultimate mix of properties in the INGPT's portfolio.
Supporting the acquisitions, INGPT independent directors, Mike Smith, Peter Brook and Trevor Scott, say that the proposed purchases are a major step forward in the development of INGPT and the fulfilment of its foundation objective to establish INGPT as a leading New Zealand property fund.
INGPT Management Limited managing director Andrew Evans said today that the deal was fair to both the interests involved and this was evident in the documentation behind the deal.
The benefits of the acquisitions, according to an explanatory memorandum being sent to unitholders, include:
Following completion of the acquisitions, INGPT's property portfolio is projected to increase from a net book value of $66 million to $358 million.
INGPT Management Limited managing director Andrew Evans confirmed that the over-renting factor in the MFL / SIL portfolio was negligible. This will be of benefit for INGPT. In addition, the MFL portfolio in particular had
demonstrated good rental growth over the past two years.
At the same time, gearing would be reduced, with the debt level dropping from 43% as at March 31 this year to a projected 32.8% at the end of March 2004. The net tangible asset backing per unit is projected to be $1.03 following completion of the acquisitions.
Ordinary resolutions in relation to the transactions will be put to unitholders for approval at a meeting of Unitholders on November 27.
Unitholders associated with INGPT Management Limited will not be able to vote on the resolution to acquire the portfolio properties from the Funds.
Unitholders associated with Symphony Group will not be able to vote on the resolution to acquire ANZ House. Symphony Group retains its present holding in INGPT and its 50% interest in the management company with ING (NZ) Limited.
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