Okay for Trans Tasman spin-off

Don Fletcher

Shareholders in listed Singapore-based developer Trans Tasman Properties voted to spin off three-quarters of their property assets into a new London-listed entity.

Four TTP Hong Kong property developments valued at $283 million will now be shunted into the new entity, Asian Growth Properties, to be listed in Britain but based in the British Virgin Islands.

TTP will dwindle, from owning $400 million-plus of Asian, Australian and Hong Kong property to holding just $117 million of New Zealand and Sydney real estate.

But shareholders did not vote on the deal without a fight.

The company's board was grilled by shareholders in Auckland yesterday who questioned the move, worried about the share price of the new British entity and criticised the deal's timing so close to Christmas.

"Tell me about it," agreed executive chairman Don Fletcher, fielding a range of queries about property valuations, the mindset of Hong Kong-based majority shareholder Jesse Lu and rules about listing the new entity on London Stock Exchange's Alternative Investment Market, a less regulated forum than the main exchange.

After two hours, Fletcher said just over 86 per cent of shareholders voted for the deal.

But the outcome was assured as it was backed by Lu's SEA Holdings, which owns 64.6 per cent of TTP.

TTP will now become a much-diminished company when most shareholders exchange two TTP shares for one share in AGP.

SEA will buy the AGP shares for $1 each for five days after the London listing but Fletcher refused to predict its eventual trading price.

Accident Compensation Corporation investment manager Nicholas Bagnall queried the timing of deals on Clearwater Resort in Christchurch and the 400ha residential subdivision Jacks Point at Queenstown.

Fletcher owns a 30 per cent interest in Jacks Point, with associates John Darby and Mike Coburn. TTP executive director Rod Hodge is also a director of Jacks Point Land Holdings.

The group bought into the project for a reported $7.9 million, had the land re-zoned and revalued at $19.3 million, then sold 200 sections to Fletcher Residential for $45 million and got more for 250 sections from finance company Hanover.

"Jacks Point is going well," said Fletcher said before the meeting, having visited it last week, back from his new base in Singapore.

He said other heads of listed property trusts or companies were also developing land in a private capacity.

"They are but they don't tell you about it. You don't know if they have not got 50 houses on the go as a private person and an investor.

"There was never anything in my contract which said I could not invest in my own right."

A subsidiary of SEA held an initial interest in the Jacks Point development but sold out more than a year ago to Fletcher and his associates.

Fletcher said he had offered the land to TTP but the board had rejected the deal so he had bought it.

Investors said after the meeting they wanted to see the documents relating to the deal and questioned why it had been turned down.


Leftovers

* TTP will be left with property worth just $117 million.
* Viaduct leasehold development land, Auckland.
* A third of Clearwater Resort, Christchurch.
* A 29ha block of land at Belfast, Christchurch.
* A half-share in 125ha land block at Woodend near Christchurch.
* Queenstown carparking building, with potential for offices.
* Strata title offices at 65 York St,Sydney.