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CDL Investments would avoid a fourth waiver from listing rule

CDL Investments would avoid a fourth waiver from listing rules if NZX lowered free-float boom

By Jonathan Underhill

March 20 (BusinessDesk) - Listed-residential property developer CDL Investments New Zealand, controlled by hotel operator Millennium & Copthorne Hotels New Zealand, would be one of the biggest beneficiaries if NZX adopts a proposal to reduce the minimum free float to 20 percent.

Last month CDL was granted its third straight waiver from the rules because members of the public held just 23.4 percent of the stock - below the current listing rule minimum of 25 percent. As at Feb. 28, CDL had 2,758 shareholders who were members of the public.

The free float for CDL will always be tight because Millennium & Copthorne owns about 67 percent of the company. The hotel company was itself granted a waiver because about 71 percent of its shares are held by London Stock Exchange-listed Millennium & Copthorne Hotels plc, a global hospitality management and real estate group. As at Feb. 28, members of the public owned 18.4 percent of the New Zealand company.

NZX listing rules say a company's shares won't be considered for quotation unless they are held by at least 500 members of the public holding at least 25 percent of the company. The aim, according to the rules, is to ensure "that there is a sufficiently liquid market" in the shares.

BK Chiu, the managing director the local Millennium & Copthorne unit and chair of CDL wasn't immediately available to comment on the listing and the lack of liquidity in the shares. Neither company has used its listing to raise capital in recent years, there have been few changes to the line up of substantial holders and little in the way of corporate activity disclosed outside the required interim and full-year results.

Of Millennium's 105.5 million shares on issue, about 70,000 changed hands today. CDL has about 278 million shares on issue, which last traded on March 28, when 3,607 shares changed hand.

Both would meet the proposed increase in the minimum market capitalisation to $15 million from $5 million and they already had more than the minimum 500 members of the public on their share registers, so the proposed reduction wouldn't affect them.

Submissions on the NZX proposals close on June 8, with final decisions expected to be made in the third quarter of this year.


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