Vital Healthcare Property Trust restructuring details are out and investors in the business which owns $2 billion of real estate here and in Australia meet in Auckland next month.
The manager, Canada's NorthWest Healthcare Properties Management, wants to list the trust on the ASX but keep the primary listing on the NZX. Investors at the AGM in Auckland last October heard about that proposal.
As well, NorthWest wants to separate the Australian assets from the New Zealand assets.
Now, NorthWest has set 10am on Tuesday, March 31 as the date investors will meet to vote at the Pullman Hotel Auckland, Waterloo Quadrant.
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"The manager wants to separate Vital's New Zealand and Australian properties into individual but stapled trusts primarily to remove inefficiencies for investors outside of New Zealand. Removing these inefficiencies is required to facilitate a foreign exempt listing on the ASX," documents just released to the NZX today said.
The manager says this would give unitholders higher returns, moving from around 8.75c per unit to 11.8 cents.
NorthWest said other benefits were an expected increase in the value and liquidity of units, the potential for inclusion in the ASX300 index, access to a broader and cheaper range of capital and a more competitive position to buy and development projects for future earnings growth.
But the NZ Shareholders Association says Vital is one of the few remaining externally managed listed property trusts on the NZX. The association has never favoured externally managed vehicles due to the potential for misalignment between the manager and the unitholders.
Michael Midgley, association chief executive, said today his entity would study documents just released and take a close look at the fees NorthWest would earn as a result of the changes.
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"We'll want to be looking carefully at that because there will be more management therefore potentially more fees," Midgley said today.
Tax was another potential issue for New Zealand unitholders under the proposed changes: "It all depends on the situation around franking credits because New Zealanders have a problem with those in Australia."
The association would look carefully at Vital's documents and only form an opinion after that, he said, announcing how it would vote proxies before the meeting.
Two years ago, the association raised alarm about NorthWest fees, saying that since it bought the management in 2012, rental income rose 88 per cent but fees rose "by a staggering 553 per cent".
For the latest restructuring proposal to pass next month, 75 per cent of unitholders must agree. NorthWest, with 24.9 per cent of Vital's listed units, can't vote. Independent adviser Grant Samuel has supported the deal, saying it is in the best interests of all unitholders.
Vital's board also unanimously recommended unitholders agree to the changes. When the trust listed in 1999, most of its assets were in this country but now three-quarters are in Australia, documents out today showed.
Units closed yesterday on the NZX at $2.87.