Proposal to internalise Argosy Property Trust management

Tuesday 19th April 2011

A proposal to internalise the management of Argosy Property Trust includes a $32.5 million payment to the trust's manager.

The listed property fund - the former ING Property Trust - today said the payment reflected the fair value of management arrangements that would be relinquished.

The independent directors of manager Argosy Property Management had agreed with the manager's shareholder OnePath - wholly owned by ANZ bank - to internalise the rights to manage the trust.

The proposal was conditional on approval by unit holders and the trustee of the trust, who would be provided with an independent report on the proposal by Grant Samuel & Associates, Argosy said.

It was expected a unit holder meeting would be held, and subject to approval, the proposal would be completed during August.

The transaction would be funded through the trust's property sale programme and existing bank facilities.

The maximum banking loan to value ratio had been increased from 45% to 50%, although the trust's objective remained to maintain its gearing at less than 40% of property assets over the medium term.

Under the proposal, the manager's remuneration arrangements would be varied so that management services were provided on a cost recovery basis only, Argosy said.

All directors of the new manager would be appointed at the direction of unit holders.

In November, Argosy said its portfolio of 81 properties was worth $946 million.

NZPA

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