Review prompts Freightways to make $60m tidy-up

By PAUL PANCKHURST

Transport company Freightways - tipped as likely to float on the sharemarket within months - is having a $60 million financial tidy-up.

The company, owned by Sydney-based private equity firm ABN Amro Capital, yesterday said it would redeem the 60 million preference shares held by 2800 New Zealand shareholders at the issue price of $1 each.

The shares were issued in 1997 and 2001 by Freightways' former owner Ausdoc.

In Auckland, Freightways managing director Dean Bracewell said the move was part of ABN Amro Capital's review of the company's financing arrangements after taking control last year.

Bracewell said bank funding would cover the payment to shareholders.

Yesterday's announcement fulfils a requirement to give three months notice of redemption, which will take place on October 31.

Shareholders will get their money within five days of that date.

Bracewell said the shares had been a "win/win" that matched the company's past financing needs with "great returns" for investors.

The dividend for the shares was last reset in November at 4.5 per cent above the then one-year Government stock yield - or 10.16 per cent including imputation credits.

That equated to a fully imputed dividend of 6.8c a share.

Market sources told the Business Herald in April that planning had started to float Freightways in the third quarter, and ABN Amro and First NZ Capital were tipped as joint lead managers.

Freightways has brands such as New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60 and Security Express.