Pyne Gould will delist in November after minorities back shift to Guernsey
By Paul McBeth
Oct. 31 (BusinessDesk) - Pyne Gould Corp will leave the NZX next month after minority investors backed a shift to The International Stock Exchange (TISE) in Guernsey, where the firm is domiciled.
Interests associated with managing director George Kerr hold about 80 percent of the firm and weren't allowed to vote at today's special meeting. That left the decision to investors holding about 10.8 percent of the stock. Of the votes cast, 77 percent were in favour of leaving NZX and 79 percent supported listing in Guernsey if that was passed.
The shares have been thinly traded in recent years, although a flurry of activity yesterday saw the biggest volume change hands in more than two years. The shares were recently down 2 percent at 24 cents, having slumped from 35 cents since the special meeting was called on Oct.19.
"A shift of listing has been signalled by the board for many years and is consistent with our strategy to deliver value to shareholders over the long term," Kerr said. "It will also deliver short-term benefits, with a significant reduction in costs for the company – which resulted from the duplication of auditors to meet NZX rules."
Pyne Gould had 1,434 shareholders as at Aug. 30, of which 1,395 lived in New Zealand. It listed on the NZX in 2004, saying it wanted to boost liquidity for its shareholders in a transparent market. At the time it had 2,000 shareholders, more than three-quarters of whom were from Canterbury. Its businesses consisted of the rural services unit Pyne Gould Guinness, which later merged with Wrightson, Marac Finance and Perpetual Trust.
The firm cited the extra cost of having auditors in both New Zealand and Guernsey for shifting the listing. The company paid 239,000 British pounds for its statutory audit and 76,000 pounds for the New Zealand audit in the year ended June 30. That's down from 478,000 pounds in 2017 and 443,000 pounds in 2016. In 2015, Pyne Gould paid 577,000 pounds in audit fees, of which 485,000 went to Grant Thornton and 92,000 to previous auditor PwC, and in 2014 it paid NZ$472,000 to PwC.
Pyne Gould's auditor Grant Thornton NZ resigned in July after a waiver from the Guernsey regulator expired. The company was replaced by Grant Thornton Guernsey to meet the local law.
Pyne Gould is on to its fourth audit firm since 2012, when KPMG quit over a disagreement with Kerr over whether some related party transactions needed disclosing. Later Grant Thornton NZ took over the audit from PwC. Its 2012 audit bill was $609,000 for PwC and $10,000 for KPMG.
The company plans to organise sub-register services to facilitate trading by its New Zealand shareholders
NZX trading is expected to end on Nov. 16 and the TISE listing will be effective from Nov. 21.