By DANIEL RIORDAN
The last of Tranz Rail's original shareholders has left the company, greasing the wheels for its market resurgence.
Wisconsin Central Transportation's 23.7 per cent stake was sold overnight on Wednesday by the US firm's new owner, Canadian National Rail.
The sale, at $3.70 a share, realised $106.2 million.
The price was 10c above Wednesday's closing price, and 10c more than the price obtained by fellow cornerstone shareholder Fay Richwhite two weeks ago for its 14.5 per cent holding.
The final removal of the share overhang, 15 months after both investors indicated their intentions to sell, fuelled an immediate 25c surge in the share price to $3.85.
The shares gained another 5c and ended the day at $3.90.
All the main members of a consortium that bought Tranz Rail from the Government in 1993 for $400 million - paying effectively 16c a share - have now quit the company.
John Cobb, manager of private stockbroking for JB Were, the firm which sold the shares for CNR, said a range of local and offshore institutions and some private JB Were clients were the buyers. There was no cornerstone buyer.
Forsyth Barr Frater Williams executive director Don Turkington said his broking firm, with several others, had a positive outlook on the stock.
"With its asset sale process, this will eventually be a lean, mean Machine and may be in a position to make capital repayments. The problem in terms of sharemarket performance has been the certain knowledge that its main holders were keen to get out. Now both of them are gone."
The fact CNR got more per share for its parcel than Fay Richwhite, although it was bigger and sold second, indicated the strong demand from institutions and professional investors, and was reflected in the share price rising after the sale, said Dr Turkington.
When Fay Richwhite sold - at 32c below market price - the share price fell 27c in a day, as the market waited for the bigger parcel to be sold.
"The company now has a very good share register with a lot more institutional involvement. There'll be a lot more liquidity. Now it's up to the company to produce some decent results and show us its restructuring is working," said Dr Turkington.
Tranz Rail is nearing the end of an 18-month restructuring process, aimed at stripping it to the core businesses of freight forwarding and ferry operations.
In another piece of good news for the company, the Rail and Maritime Transport Union said yesterday it had finalised terms for a new collective agreement for members employed by Alstom NZ, the company to which Tranz Rail has contracted its locomotive services.
* John Loughlin has joined Tranz Rail's board, replacing Wisconsin Central representative Carl Ferenbach. He is chief executive of Hawkes Bay meat company Richmond.
Tranz Rail managing director Michael Beard said at December's annual meeting that the company needed to get more New Zealanders on its board. At that time, four of the company's nine directors, including Mr Ferenbach, were American former directors of Wisconsin Central with no links with Canadian National.
Tranz Rail gets ready to roll as Wisconsin sells its stake
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