Anne Gibson

Property editor of the NZ Herald

Kiwi Income stake up for sale

Kiwi Income Property Trust board members at last week's shareholders meeting before a vote to buy the management contract from CBA. Photo / Chris Gorman
Kiwi Income Property Trust board members at last week's shareholders meeting before a vote to buy the management contract from CBA. Photo / Chris Gorman

An 8.6 per cent stake in NZX-listed landlord and Sylvia Park mall owner Kiwi Income Property Trust is now in play, as its former manager and major investor Commonwealth Bank of Australia (CBA) sells down its holding.

Kiwi, which went into a trading halt this morning, has just announced that CBA appointed Goldman Sachs to sell down its unit holding in the Trust by way of placement (likely to be structured as a non-underwritten widely offered bookbuild).

"CBA holds, through its subsidiaries, approximately 8.6 per cent of the units in the trust. The sell down is to occur during the course of today.

A trading halt in both KIP units and KIPGC mandatory convertible notes is now in place to allow the sell down to occur in an orderly fashion. The halt is expected to remain in place for the remainder of today's trading," the announcement said.

A major institutional investor could buy the 8.6 per cent stake, worth more than $50 million.

The action follows the move by investors last week to buy the management from CBA.

"The trading halt has been put in place pending the release of a material announcement," Kiwi announced earlier this morning.

The business owns real estate around New Zealand valued at $2.1 billion, making it one of the biggest NZX entities.

CBA also owns a big stake in Kiwi and is understood to be keen to sell its units.

On Friday, Kiwi issued a statement announcing its internalisation was settled.

"The trust is managed by Kiwi Property Management Limited (formerly named Kiwi Property Management (NZ) Limited), a newly established company controlled by unit holders. Existing staff have now commenced employment with the new manager," said a joint statement from chief executive Chris Gudgeon and investor relations and communications manager Mathew Chandler.

"The net internalisation payment of $70.5 million (plus GST where applicable) has been funded through the trust's committed bank debt facilities, which have been increased by $25 million to $875 million," they said.

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n3 at 21 Sep 2014 23:58:04 Processing Time: 536ms