David Cushing on National Property Trust

David Cushing on National Property Trust

Unitholders holding in excess of 10% of the units in The National Property Trust (NPT) have today formally requisitioned a meeting of unitholders relating to the removal of the Manager of NPT, The National Property Trust Limited, a wholly owned subsidiary of the St Laurence group of companies.

Unitholders who have put the resolutions to requisition the meeting include: H&G Limited, THT Properties Limited, Highgate Group Limited, RGH Holdings Limited, Penmaen Limited, Castlemore Investments Limited and Yoyo Nominees.
The resolutions to be put to unitholders are as follows:

Extraordinary Resolutions
(1) Pursuant to section 19(2) of the Unit Trusts Act 1960, The National Property Trust Limited be removed as Manager of The National Property Trust.
If that resolution is not passed as a section 18 resolution, then unitholders vote on the following resolution.
(2) The Trustee be directed to apply to the Court to request The National Property Trust Limited be removed as Manager of The National Property Trust for the purposes of section 19(1) of the Unit Trusts Act 1960.
Ordinary Resolution
(3) That the voting percentage of units held by those unitholders not associated with St Laurence Group voting in favour of the first two resolutions, to those unitholders not associated with St Laurence Group voting against the resolutions, be disclosed via the NZX market announcement platform on the following business day from the meeting date.
The unitholders putting these resolutions forward all believe it is clearly in the best interests of all unitholders that the management arrangements with The National Property Trust Limited be terminated. Reasons are as follows:
NPT, under the management of St Laurence, has been one of the worst performing property trusts listed on the NZX for a prolonged period of time. NPT has been a long term underperformer.
The fees paid to the Manager and corporate governance are materially out of line with current best market practice.
NPT continues to trade at a large discount to Net Asset Value (NAV). The Manager has done very little to rectify this unsatisfactory situation. The NAV is currently around $0.70 cents yet the units are trading at approximately $0.48 cents. Compared to its property peers on the NZX, the discount to NAV results in NPT trading at one of the largest discounts to NAV on the NZX.
The Manager is out of touch with unitholders’ expectations. For example in their April 2010 newsletter the Manager stated that it was considering “acquiring well located properties”. To consider buying additional properties when the market price of units in NPT trade at a large discount to NAV is not commercial. If the Manager wants to buy anything it should be proposing to buy NPT units at a discount for the benefit of all unitholders.
The ultimate parent of the Manager is St Laurence Limited which has been placed in receivership by Perpetual Trust. The status of the Manager reflects extremely poorly on NPT and taints the entire vehicle. NPT unitholders deserve better than to have a Manager controlled by the receiver of St Laurence Limited.
The 30 April market release by the Manager refers to a potential sale of the shares in the management company and not the management rights directly. As the Trust Deed of NPT is somewhat antiquated, the Trustee has no direct role in such a process, and so unitholders’ interests cannot be protected.

David Cushing, director of H&G Limited said: “The current situation is totally unacceptable. We have been in discussions with many unitholders and there is widespread dissatisfaction with the management of NPT. We urge other unitholders to join us in voting to dismiss the Manager.

“The St Laurence group of companies holds some significant parcels of units in NPT and may, through self interest, attempt to block the passing of the resolutions. Even if St Laurence successfully blocks the extraordinary resolutions, it is our belief that if a strong majority of independent unitholders vote to remove the Manager, we expect the Trustee to apply to the court under section 19 of the Unit Trusts Act to dismiss the Manager. We urge all unitholders to vote in favour of all these resolutions as it is clearly in the best interests of unitholders to remove the Manager.”

ENDS

© Scoop Media