This article is from the Australian Property Journal archive
TRINITY Limited has carved up a slice of its wholesale funds management business to Clarence Property Corporation Limited.
Clarence has paid $4 million for a 50% stake in Trinity Funds Management Limited plus 50% of the net assets of the business with a further payment of $1 million contingent on subsequent events. The 100% TFML shareholding valued at $9.6 million as at December 31 2009.
Clarence has been in the business of property funds management for over a decade with its principal externally managed vehicle being the unlisted Westlawn Property Trust.
The sale is linked to the contemporaneous sale by Trinity Stapled Trust of 6,000,000 units in the Trinity Property Trust for a further $5.4 million at 90 cents per unit.
Trinity chairman Brett Heading said this transaction is part of the group’s ongoing debt management initiatives to free up capital and reduce its National Australia Bank debt facilities.
“The completion of this transaction (together with the completion of the sale of 15 million units in the Trinity Property Trust just announced) will see the group meet the testing of its loan-to-value ratio covenant under the NAB facility applicable as at 31 May 2010,” he added.
The board TFML will remain unchanged and comprise independent directors Geoff McWilliam, Ron Higham, Trevor Gordon and Trinity Chairman Brett Heading.
Following completion of the transaction, Trinity’s joint managing director Steve Leigh will become the CEO of TFML and resign as a director of Trinity Limited.
And joint managing director Chris Morton will change role and become deputy chairman of Trinity. Craig Bellamy remains as CEO of Trinity.
“The Trinity Limited Board believes that the objectives of Trinity Limited and Clarence make them compatible partners and will give Steve Leigh and his team good support in taking the TFML business forward, so as to deliver increasing value to the Trinity Group security holders.
“With a stabilising balance sheet, the Board will now seek to identify strategies for the growth of the Trinity Group’s ongoing business activities,” Heading concluded.
In other related news, the Trinity Stapled Trust has sold part of its holding in the Trinity Property Trust for $12.7 million.
An institutional investor has bought the 15,000,000 TPT units from the Trinity Stapled Trust at 84.73 cents per unit — representing an 8.8% discount to the book value.
Trinity Stapled Trust’s total investment in TPT units was valued at $33.3 million as at December 2009. On completion of the sale, its total investment in TPT will be valued at $19.3 million, representing a 5.6% holding in TPT.
Australian Property Journal
