This article is from the Australian Property Journal archive
THE Goodman family have voluntarily sold off their securities bought through margin loans in the Goodman Group to European and Middle Eastern investors.
Chief executive Greg Goodman said the securities in the trust that he and Patrick Goodman held through private family companies, totalling 78 million were sold at $3.70 per security on an ex-distribution basis for around $288.6 million.
As a result, Greg and Patrick Goodman directly and via their family holding companies have no remaining margin loans on GMG securities.
“The Goodman family has re-invested significant capital in GMG over the past 10 years without ever selling a security. A portion of our re-investment in the group has been funded with facilities linked to the equity we have built in our GMG stake.
“These facilities had covenants which we believe, given the current market conditions, are no longer in the best interests of Goodman Group and all securityholders,” he continued.
“Consequently, we have voluntarily decided to divest a portion of our stake to retire all such loans on GMG securities,” he added.
GMG securities have fallen more than 40% from last September’s high of over $7.40.
In addition, Goodman said the trust’s directors have no margin loans on GMG securities and senior executives also have no material margin loans on GMG securities.
Despite the sell off, Goodman said he remains absolutely committed to the group and aligned with securityholders by retaining a significant stake.
“I look forward to the continued success of the business now that this potential overhang has been removed and am extremely pleased that the majority of the stock has been placed with our global strategic partners,”
Goodman said the trust is in a strong debt position via unsecured platform with credit ratios comfortably within bank covenants and ratings agency targets (BBB+/Baa1 S&P/Moody’s rating) and there is no finance facilities that contain triggers linked to GMG market capitalisation.
And now GMG does not have any margin loans in relation to any of its stakes in listed entities.
The trust remains on track to deliver operating income of 34 cents per security for FY08.
GMG’s share price closed unchanged at $4.09.
Australian Property Journal
