MARTA STEEMAN
The 150-year old Pyne Gould Corporation will remain listed “at this stage”, its cornerstone shareholder George Kerr says, although it is shrinking to its funds management businesses.
The shape of the old Canterbury company has become clearer with an update to shareholders yesterday.
PGC is effectively splitting into two businesses – a finance group aiming to become a bank and a wealth management business – and is selling off its third asset, an 18.3 per cent stake in PGG Wrightson.
PGC said yesterday it would retain its wealth management businesses and the new funds management business Torchlight, set up by its cornerstone shareholder and director George Kerr.
PGC said it intended to expand the wealth management business in New Zealand and Australia and had the resources to do so.
George Kerr said yesterday PGC would essentially be an Australasian wealth management business.
“The plan definitely at this stage is it [PGC] remains listed,” Kerr said.
Asked about capital to expand Kerr said the “bad” Marac loans that remained with PGC could be turned into cash progressively for expansion of the wealth management business or the cash returned to shareholders.
More details on PGC’s future were likely to be released around the time of PGC’s half-year result towards the end of the month.
Hamilton Hindin Greene director and sharebroker Grant Williamson said PGC would be much smaller and he thought a PGC share consolidation would be likely.
PGC needed to have a good growth strategy otherwise remaining listed seemed “a bit pointless”, Williamson said.
Many of the staff and management and some of the board of PGC will cross to Building Society Holdings (BSHL), which is essentially an enlarged Marac Finance, a PGC subsidiary.
The latter recently merged with two building societies with intentions to seek a banking licence for BSHL.
BSHL listed on the NZX last week. It has $2.2 billion in assets, mostly loans, and 90,000 borrowers.
PGC told shareholders yesterday it would now likely be late May rather than March when they would receive their shares in BSHL and PGC would distribute all the BSHL shares to shareholders rather than the majority as it had previously said.
PGC has a 72.2 per cent stake in BSHL, just over 216 million shares.
The timing of the share distribution was determined by the success or not of the partial takeover bid for PGG Wrightson, PGC said.
PGC is selling its 18.3 per cent stake in PGGW to the bidder, Chinese investor Agria Corp. The offer closes around April 15.
If Agria was successful PGC would seek court approval for a scheme of arrangement and seek shareholder approval for the distribution of all the BSHL shares to PGC shareholders.
It had intended initially to sell a portion of its BSHL shares to institutions to repay a $27 million debt to a subsidiary company.
But PGC managing director Greenslade said it now expected to repay that debt from selling the PGGW shares and also use about $5m for PGC business.
Asked if there had been no interest from institutions in the BSHL shares, Greenslade said it was early days for BSHL in terms of the listing where the shares listed at 88c and have fallen to 73c.
Greenslade said he could not comment on the potential for a competing offer for PGGW. That may come from Canadian company Agrium.
– BusinessDay.co.nz
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