Share rise vindicates rail chiefs who spurned Toll

By PAM GRAHAM

Tranz Rail shareholders who spurned Australian bidder Toll Holdings include two former chief financial officers and the current group general manager of rail services.

The holdouts have been vindicated by a $1.55 share price, 45c in excess of Toll's offer.

They have forced Toll to run the company with minority shareholders it did not want.

The list of 2090 remaining holders includes former chief financial officer Ron Russ, former chief financial officer Wayne Collins and group general managers of rail services Noel Coom.

Missouri-based Russ has 313,998 shares, Collins 100,000, Coom 554,937 and the Coom family 14,000.

The biggest remaining holdings are either in nominee companies or in the 22.3 million shares, equal to 10 per cent of the company, held by shareholders using the New Zealand Central Securities Depository.

It was not possible from one check of the register to work out who bought the 1.3 million shares sold by AMP's passive fund on December 22.

There were 11 clients of ASB Securities still on the register, several of whom first became shareholders when the shares plunged to 30c last April.

Others still on the register include Martin Van Zonneveld, the Westmere man who ran a web-based campaign against the takeover, with 143,871 shares, and Wendy Pye Enterprises with 5143.

A holder in the name of Cavill White Securities marked care of retired broker Don Turkington entered the register last October.

* Toll Holdings has lent Tranz Rail $55 million after the related party transaction was scrutinised by the NZX, an independent board committee and Macquarie New Zealand.

The NZX granted a waiver from exchange rules on condition that the terms and conditions of the loan were disclosed before the next annual meeting.

Toll owns 84.2 per cent of Tranz Rail.

The loan was reviewed by a conflict committee of the Tranz Rail board comprising the two independent directors and one executive director and also by Macquarie New Zealand.

Its terms and conditions were similar to existing facilities but there was no establishment fee and security and covenants arrangements were more advantageous.

Tranz Rail's liquidity crisis last year was exacerbated by a bank loan repayment schedule, demands for extra security from lenders and increases in interest rates when covenants were broken.

The company also has a $100 million unsecured subordinated fixed rate bond issue maturing in October this year that will require refinancing.

The bonds currently pay an interest rate of 8.95 per cent.