Revamped offer ready for investors in suspended ING funds

A revamped offer to investors in two suspended ING funds avoids a unitholder vote, and requires investors to agree not to start or continue any claims or legal action related to the funds.

In March 2008, ING New Zealand announced it was suspending withdrawals from its ING Diversified Yield Fund (DYF) and the ING Regular Income Fund (RIF), which then together had $521 million under management.

Last February ING NZ announced a proposal under which investors could choose to be guaranteed a minimum price in five years time of 83c per DYF unit and 86c per RIF unit.

Alternatively, investors could opt to "cash out" their units for 60c per unit for the DYF and 62c per unit for the RIF.

Under the revamped proposal, released today, the cash out option remains with payment to be made by late August.

Under the new five-year option investors sell their units to an ING NZ subsidiary for the cash out price.

The money would then be transferred to a cash account with ANZ National Bank, 49 per cent shareholder in ING NZ. The account will have an interest rate of 8.3 per cent a year for the next five years, while providing access to the money if and when it is wanted.

If no deductions are made from the account, the maximum potential gross return in five years would be 91c for DYF units and 94c for RIF units.

But information about the proposal says the actual gross return will "almost certainly be less" because the maximum figure assumes no tax is deducted from interest earned.

ANZ National and ING NZ's other shareholder ING Group are putting $400 million into the proposal.

ING NZ chief executive Helen Troup said the revamped offer was responding to feedback from investors and advisers that five years was too long to wait for access to their money.

The most recent assessment of the funds indicated the future value of the units in the funds during the next five years was likely to remain lower than the offer prices, she said.

The payment being offered now was around three times the manager's current estimated value of unitholders' investment.

"As a condition of accepting the offer, investors will be required to agree not to start or continue with any claims or legal action related to the funds. We believe that's a reasonable term as part of this very good offer," Ms Troup said.

Investors can also choose to remain unitholders, but anyone choosing to do so is warned they would only have access to their money if the suspension is lifted or the funds are wound up.

Information about the proposal also points out it is no longer reliant on a unitholder vote, as was previously the case.

ANZ National said its customers could accept the offer and, for a limited period ask the bank and the Banking Ombudsman if necessary, to consider complaints not addressed through the ING offer.

Customers would need to send ANZ a request by the end of July to have their position reviewed.

- NZPA