Archive | NZRPG

NZ Retail Property Group pulls backdoor listing

NZ Retail Property Group Ltd advised listed shell company Bethunes Investments Ltd today that it had terminated its proposed reverse listing transaction.

Bethunes chair Chris Swasbrook said: “The decision follows a non-deal roadshow by NZRPG where market feedback indicated a capital-raising in the current climate would not attach – in the NZRPG board’s view – a fair & reasonable price to NZRPG’s portfolio of assets, given softening dynamics impacting the listed property sector & property market generally.”

NZ Retail Property Group said its board would now assess various alternative capital management options, which it expected to progress after the 23 September general election.

Mr Swasbrook said the decision was disappointing, but Bethunes shareholders hadn’t incurred any direct costs in this transaction, and therefore were no worse off than before the proposed transaction was announced.

He said Bethunes continued to research new investment opportunities and expected to embark on a new capital-raising this year.

Image above: NZ Retail Property Group founder, and still sole director, Mark Gunton.

Links:
NZ Retail Property Group
NZX 10 July 2017: 
NZ Retail Property Group presentation

Earlier stories:
12 July 217: Retail Property Group valuation up 44% as NZX listing looms
10 March 2017: Gunton looks to backdoor-list Retail Property Group through Bethunes
25 May 2016: 
Milford shopping centre expansion approved

Attribution: Company releases.

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Retail Property Group valuation up 44% as NZX listing looms

NZ Retail Property Group Ltd’s pre-transaction restructuring to enable a backdoor NZX listing through Bethunes Investments Ltd has been completed, and Bethunes chair Chris Swasbrook said on Monday legally binding documentation to formalise the transaction should be entered within a week.

When Bethunes (previously the philatelic business Mowbray Collectables Ltd) said in March it had signed a non-binding conditional term sheet with NZRPG and its controlling shareholder, Westgate Power Centre Ltd (headed by Mark Gunton, pictured above), the shares in NZRPG were estimated at about $400 million.

In a roadshow presentation about its future look issued on Monday, Bethunes said: “Based on current valuations, NZRPG is expected to have about $575 million of assets in its property portfolio, including rights to acquire additional assets. About 40% of its total property assets – including the assets to be acquired – are development in nature.”

The portfolio comprises holdings in 3 Auckland town centres – Westgate, Milford & Birkenhead – and the Fraser Cove shopping centre in Tauranga.

NZRPG is unique in New Zealand in selling apartments above 2 of its mall developments – Milford (under way after a long consent battle) & Birkenhead (plans outlined).

Its main project has been at Westgate, at the top of the North-western Motorway (State Highway 16) in Auckland, where it accumulated 57ha for a masterplanned town centre servicing the north-west and still holds 28ha that’s ready to build on, on top of the developments already constructed.

In the words of the presentation, “Its existing [Westgate] holdings have a strong & stable cashflow and are well positioned to build on organically as demand materialises.”

The company said it had a defined path to portfolio growth: “NZRPG has been at the forefront of planning for the urban intensification required to provide a credible outcome for Auckland’s growth aspirations (and supported by the Auckland unitary plan).

“It is focused on the strategic development of its existing retail centres into planned town environments & mixed use assets. This is expected to include the provision of residential overlays to all its town centre properties, which will enhance the retail performance and allow for capital to be recycled into the core business.”

NZRPG board named

When NZRPG takes over the Bethunes listing, the board will comprise Paul Duffy as independent chair and directors Mark Gunton, Sean Joyce & Bruce Cotterill. Mr Gunton, founder of the business 30 years ago, is an executive director and the others are independent.

Mr Duffy is a former chief executive & executive director of Stride Property Ltd and now chairs Augusta Capital Ltd. He’s also a director of NPT Ltd, the NZX-listed property company which Augusta secured a big enough toehold in to defeat Kiwi Property Group Ltd in April in a contest for NPT’s management contract.

Mr Cotterill was elected as independent chair of NPT in April after winning a board seat on Augusta’s nomination.

Mr Joyce is a corporate & commercial lawyer in Auckland, has been a non-executive director of a number of companies listed on the NZAX & NZSX, a non-executive director of a consumer finance company & a funds management firm.

One NZX-listed shell company he’s chaired, NZF Group Ltd, was renamed Blackwell Global Holdings Ltd on Monday after a reverse listing by Taiwanese wholesale investor Chai Kaw Sing (Michael Chai).

Links:
NZ Retail Property Group
NZX 10 July 2017: NZ Retail Property Group presentation

Earlier stories:
10 March 2017: Gunton looks to backdoor-list Retail Property Group through Bethunes
25 May 2016: Milford shopping centre expansion approved

Attribution: Bethunes release, NZRPG & Joyce websites.

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Gunton looks to backdoor-list Retail Property Group through Bethunes

NZ Retail Property Group Ltd owner Mark Gunton announced plans yesterday to backdoor-list the development company through NZX-listed shell Bethunes Investments Ltd.

Bethunes (previously the philatelic business Mowbray Collectables Ltd) said it had signed a non-binding conditional term sheet with NZRPG and its controlling shareholder, Westgate Power Centre Ltd.

NZRPG developed the original Westgate business centre at the top of the North-western Motorway and is developing the second, much larger stage beside the motorway extension, which includes warehousing & industrial uses as well as a new mall & business centre (pictured above).

Mark Gunton.

Mr Gunton’s company also owns 2 North Shore malls where it’s adding residential capacity, at Milford & Birkenhead.

Bethunes summarised the listing transaction thus:

  • Bethunes would transfer all its assets (except for $100,000 in a series of bonds and some cash) into a wholly owned subsidiary, BIL 2016 Ltd (New BIL)
  • New BIL’s shares will then be distributed pro rata to all of Bethunes’ existing shareholders
  • New BIL will assume the name Bethunes Investments Ltd
  • The business of NZRPG will then be reverse-listed into the resulting shell of Bethunes through Bethunes issuing shares to Westgate in exchange for all of the shares in NZRPG
  • Bethunes will then assume the name NZ Retail Property Group Ltd
  • For Bethunes shareholders, the effect if the transaction is completed is that they will retain their current Bethunes shares, which become an interest in NZRPG, but will also, for no consideration, receive shares in New BIL, which will be an interest in the same assets & business plan that BIL presently has.

Valuations

The initial indicative & non-binding estimates for the transaction are:

  • The shares in NZRPG are estimated at about $400 million
  • The shares in Bethunes (less the assets & receivable held in BIL 2016 Ltd) on a debt-free basis are valued at $1 million plus the NZX bond of $75,000 & $25,000 cash
  • Based on these valuations, Westgate will hold about 99% of the share capital in Bethunes. These values are subject to final determination & agreement and may vary.

Conditions

The transactions contemplated by the term sheet are conditional on:

  • Bethunes conducting a due diligence investigation of NZRPG
  • Westgate conducting a due diligence investigation of Bethunes
  • Entry into legally binding transaction documents between Bethunes & Westgate
  • Obtaining any necessary waivers from NZX required to proceed with the transaction
  • Bethunes obtaining all shareholder approvals that may be required to undertake the transactions, including under the Companies Act, the Takeovers Code & the NZX listing rules.

Bethunes shareholders must approve deal. They’ll get an independent report and an appraisal report, and Bethunes intends to call a shareholder meeting by 30 June, with the intention of completing the transactions shortly after approvals are obtained.

Bethunes chair Chris Swasbrook  said the Bethunes board was investigating either re-listing New BIL following the transactions or placing New BIL on an alternative share trading platform to retain some liquidity in New BIL. A decision on this will be made before shareholders are asked to vote on the NZRPG transaction.

NZRPG’s business

NZRPG is a retail property developer, owner & manager. It has over 100,000m² of leasable space in its portfolio.

Its intention in listing is to grow its investment portfolio through the strategic development of existing retail centres into planned town environments, and the development of mixed use assets that derive the highest value/m².

The company said: “Historically income generated from property assets has, to a large part, been utilised to fund the ongoing development, planning & design processes necessary to ensure the long-term opportunity for these town centres. As a result, NZRPG is now uniquely positioned with a significant & long-term development pipeline, which will provide long-term income & value growth.

“NZRPG is seeking capital to realise these plans, and a reverse listing is intended to support securing new capital. NZRPG is presenting to investors the opportunity to take part in one of the most significant retail property development pipelines in New Zealand. The company is seeking capital to embark on the next phase of its pipeline, which includes one of New Zealand’s biggest mixed use property development opportunities – Westgate town centre.

“In addition to the ongoing completion of the 48.5ha Westgate town centre, both the Milford centre & Highbury centre are undergoing retail development with a residential overlay. The success of these developments is underpinned by the expansive urban town planning that is reshaping Auckland.

“These growth opportunities include the provision of residential overlays to all the town centre properties (Milford, Highbury & Westgate) which will both enhance the retail performance of the centres and allow for significant tranches of capital to be recycled into the core business. The Milford development plan is underway, with completion due in mid-2019.”

Swasbrook’s top table links

Bethunes chair Chris Swasbrook is managing director & founding shareholder of the manager of Elevation Capital Ltd. Precinct Properties NZ Ltd chair Craig Stobo chairs Elevation’s manager and is a shareholder, and corporate legal advisor Andrew Harmos is a non-executive director & shareholder.

Mr Swasbrook was previously a partner of Goldman Sachs JBWere Pty Ltd and co-head of institutional equities at Goldman Sachs JBWere (NZ) Ltd.

Mr Stobo has worked as a diplomat for the New Zealand & Australian governments, as an economist, investment banker and as chief executive & executive vice-president of BT Funds Management NZ Ltd.

Mr Harmos is a founding partner of specialist corporate legal advisory firm Harmos Horton Lusk Ltd, formed in 2002 after his 16 years as a partner of Russell McVeagh. He’s also a director of ASX-listed Scentre Group Ltd.

Links:
NZ Retail Property Group
Elevation Capital
Bethunes

Earlier stories:
15 February 2017: Auditor-general argues for more Westgate deal disclosure but doesn’t see wrongdoing
25 May 2016: Milford shopping centre expansion approved
22 February 2013: Gunton gutted by Milford decision but will fight on
1 February 2010: Retail Property Group puts 48 units up for sale
18 November 2009: Opposition pushes Massey North start out 8 years from conception
19 December 2008: Expanded Westgate a new Newmarket?
Attribution: Company release.

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