Commonwealth Bank sells down KIPT
Commonwealth Bank of Australia (CBA) is reducing its holding in Kiwi Income Property Trust (KIPT) .
The NZX-listed property trust, said in a market announcement this morning that CBA had appointed Goldman Sachs to sell down its holding.
The Australian bank owned about 8.6 per cent of the trust's units through subsidiaries and also held KIPT's management contract.
Last week KIPT unitholders voted overwhelmingly to bring the trust's management back in house.
KIP's units were placed in a trading halt this morning and would not trade for the rest of the day so the sell-down could occur in an "orderly fashion", KIPT said.
The sell-down will terminate CBA's management contract and cost $70m. However, KIPT expects the buyout will save it $8m a year. The trust will be managed by Kiwi Property Management (NZ), a newly established company controlled by unitholders.
Trust manager chairman Mark Ford said that management would be on a break-even basis.
Unitholders also agreed to increase directors' total fees to $585,000 a year and raise the amount the trust can borrow to 45 per cent of the fund's gross value.
KIPT's units last traded at $1.10, 3.9 per cent lower than a year ago.
KIPT holds a $2.1 billion portfolio that includes Wellington's Majestic Centre.