National Property restructure gets go ahead

National Property Trust's unit holders look to have overwhelmingly backed a buy out of its management contract and restructuring to convert the trust into a company.

At the trust's annual general meeting in Auckland today unit holders were asked to give the management "indicative" approval to work up a full proposal to restructure the trust. An initial count of proxies suggested votes were more than 90 per cent in favour.

The externally held management contract is currently owned by the St Laurence-associated National Property Trust Limited (NPTL).

The manager will receive $2.5 million for the contract - a far cry from the $13 million St Laurence paid in 2005 - while the trust will also buy 31.95 million units held by the manager and "associated persons" for a total of $16.6 million, or 51 cents per unit.

An existing debt facility with the Bank of New Zealand will be used to cover the $16.6 million cost.

The proposal was drafted after concerted pressure on the St Laurence-linked manager by unhappy unit holders led by investor David Cushing, through the Cushing family's H&G.

In a deal with the manager the Cushing group dropped their bid to remove the manager at a special general meeting in favour of the contract buy out.

Mint Asset Management trans-Tasman equities manager Shane Solly said today's result meant NPT was ''taking lemons and making lemonade".

"We are very supportive of the proposal. We think this will put NPT into the best of the breed for listed property securities. This is a really good outcome for NPT investors."

Mint holds just under 5 per cent of NPT's units but would look to increase its exposure, he said.

The proposal to corporatise the trust will be completed for a second unit holder meeting and vote set down to be held before November 30.

Developing the proposal could cost between $650,000 and $850,000 and includes a detailed report on the proposal - likely to be completed by Grant Thornton - and legal, accounting and corporate restructuring fees.

The new listed company should be up and running by April 1 next year, NPT director Andrew Walker said.

As part of the deal all systems, records and assets held by the management company will be transferred over to the new company and all eight staff retained.

National Property Trust was established in 1994 and has a portfolio of properties in Auckland, Wellington,

Napier and Christchurch valued at $191.4 million at the year ended March 31.

Its shares were trading at 53 cents this morning.

In the other vote, Brian Kreft was reappointed to the trust's board.

- © Fairfax NZ News