Chow brothers move Auckland property into NZAX-listed shell company RIS Group
Wellington property magnates the Chow brothers are one step closer to listing their $200 million portfolio.
John and Michael Chow received approval from the NZX on Friday for the reverse takeover of listed shell company RIS Group.
John Chow said they wanted to fast-track their property portfolio growth.
"Taking over the RIS shell by transferring in our Otahuhu property is the first step in moving most of our private portfolio of buildings into a public vehicle...
"This is exciting news for us."
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The move is part of an agreement in which RIS agreed to buy the shares in 16 Park Ave – a refurbished Auckland hotel – for $7 million. In turn, the brothers will hold 90 per cent of the ordinary shares in RIS.
The brothers, who have made an estimated $75m fortune from brothels, hotels and commercial property deals, opened the 135-room hotel last year.
The property is part of an 18-strong portfolio valued at over $200m, which includes The Mermaid strip club and Capital Market food court in Wellington.
"But we have 'til now been a large, family business, so the time is right to bring in external governance and a corporate approach to our planned investment growth," John Chow said.
In a statement, RIS Group chairman Roger Bennett said the NZX had approved a special meeting date to discuss the conditional agreement with shareholders.
"The only outstanding condition of the agreement is the approval of the agreement by shareholders."
On the private front, the brothers have been busy investing in new properties, including the purchase of the Zen Building in Rotorua from an Auckland property investor.
They plan to turn it into a 130-room hotel with a 4-star rating. It is due to open in February next year.
In December the Chow brothers teamed up with Webber Capital founder Clint Webber to launch a finance company - Inno Capital - to shake up the property finance sector by funding deals of up to $50 million.
"Although we are in growth phase we retain plenty of our own equity so we are protected from market downturns," John Chow said.
"But we are very optimistic about what 2016 brings."