Tainui plans for Ryman windfall

Tainui Group is keen to complete development of The Base shopping mall project in Hamilton. Photo / Christine Cornege

Proceeds from Tainui Group Holdings' sale of its 4.5 per cent stake in Ryman Healthcare will be used to reduce debt, to finish off its Te Awa at The Base shopping mall project in Hamilton, and to fund its planned Ruakura transport hub, chief executive Mike Pohio said yesterday.

Tainui Group, the commercial development arm of Waikato's Tainui tribe, said yesterday that it sold 22.5 million shares in Ryman for just over $58 million, at an average price of $2.58. The sale booked a $21 million profit after just three years on the aged healthcare and retirement company's share register.

Ryman was Tainui's first direct investment in the sharemarket.

The group and the South Island's Ngai Tahu Capital terminated an agreement between them which allowed pre-emptive rights over each others' stakes. Ngai Tahu still has 40 million Ryman shares.

Ryman has performed strongly in the past year. Shares closed yesterday at $2.66, not far off the top of its $2.00 to $2.84 range over the past year.

"This was a good time for us to sell," Pohio said. Tainui has about $250 million in credit facilities, of which about $200 million has been drawn down.

Following the transaction, the group will have about $140 million in borrowings but the $250 million credit facility will remain, he said.

When Tainui bought the stake it was the start of its development of Te Awa.

"We had some reserve investment capacity at that time, and chose to not only progress the development of Te Awa but also to invest in Ryman," he said.

"We are keen to finish off development of The Base - that's our flagship asset." Tainui is also keen to advance development of Ruakura - a 500ha property that is intersected by the main trunk line and the yet-to-be completed Waikato expressway.

The plan is to create a major inland port and hub to serve Auckland, Bay of Plenty and the Waikato.