Shortfall in take-up of National Property issue

The manager of National Property Trust said today 84 per cent of rights in a pro-rata renounceable issue of convertible preference units (CPUs) had been taken up.

Underwriter, St Laurence Property & Finance, a unit of NPT's controlling shareholder, St Laurence Holdings Ltd, and its sub-underwriters, had to take up 16 per cent of the issue.

The issue at $1 per CPU was to restore debt ratios after trust deed covenants had been breached.

Unit holders were entitled to two CPUs for every seven units held and could also apply for additional CPUs, up to 35 per cent of their entitlement.

All additional applications were accepted but there was still a 16 per cent shortfall.

The target of $35 million of new capital was still raised after the underwriters took up the slack.

St Laurence Holdings's National Property Ltd, which took over the management of NPT in November 2005, said new capital would allow the manager to focus on managing properties.

The capital was needed to strengthen Christchurch-based NPT's capital base, reduce debt, provide working capital and to create the capacity for repayment of NPT's November 2007 capital notes.

NPT executive chairman Kevin Podmore said it would also allow the trust to reinstate dividend distributions on units for the year ending May 21, that will be paid in September 2006.

"The capital raising restores the ratio of borrowings to the gross value of the Trust Fund to below 45 per cent as required under the Trust Deed and stabilises the financial position of the Trust," Mr Podmore said.

The borrowing limit was exceeded when the property portfolio was revalued in February. The ratio of borrowings, excluding capital notes, to the gross value was not 32.3 per cent.

The CPUs carry a fixed gross distribution of 7.75 per cent and convert into units on May 31, 2009 or earlier under specified circumstances. The conversion rate is 169 units for every 100 CPUs held.

NPT units last traded at 72 cents. They have traded between 64 and 99 cents in the last year.

- NZPA