Proposal For The Solvent Winding Up Of The Publicly Listed
Property Leaders Group
Statement made by Bill Wilson, Chairman, Property Leaders Australia Ltd, Property
Leaders New Zealand Ltd and Property Leaders Australia & New Zealand Ltd
To protect the existing wealth of shareholders, Directors will present proposals to shareholders to wind up the three
publicly listed property companies Property Leaders Australia, Property Leaders New Zealand and Property Leaders
Australia & New Zealand.
Directors plan to put resolutions to wind up the three companies to the respective annual meetings of shareholders of
the companies to be held on 23 August 2001.
While the concept behind the establishment of the three companies of a passive investment fund based on publicly listed
property companies, with the hind itself being publicly listed, is an excellent one it has not found favour with the
Part of the reason for this is timing, with the property sector attracting limited interest in recent years,
particularly in New Zealand.
Consequently, the three listed Property Leader companies have struggled to attract new investors or investment funds
against competition from a host of new managed funds products introduced to the market since the property companies were
listed in 1998.
Currently, the three companies have between them some 1,000 investors and funds invested of $32 million.
Without the benefit of the investment hind being much larger, the administration costs associated with investing through
publicly listed companies have restricted the returns available to shareholders.
Also on the horizon is the very real possibility of the companies losing their tax free status from Inland Revenue in
relation to capital gains.
When they were formed, the three Property Leaders companies received a three-year binding ruling excluding them from tax
on capital gains. Without the benefit of that exemption the companies would not have been formed.
The exemption expires in March 2002.
In discussion papers and announcements over the past six months, Inland Revenue has made it clear that passive, single
sector funds, such as the property companies, are unlikely to receive renewal of their tax free status.
Directors of the companies have reached the conclusion tat based on lack of current interest in the funds, the costs
associated with administering public companies and the potential loss of tax free capital gains status, it would be best
for shareholders if they acted early and decisively and the companies were wound up.
In doing this while the companies are financially sound, Directors believe that they will protect the existing wealth
investors have in the three property companies by winding them up.
The New Zealand Guardian Trust Company Limited, the manager of the three companies, has a number of other Funds
available for investment and Directors will look to give investors the option to reinvest in those Funds without having
to pay any entry fees.
Until a final decision on the future of the three companies is made by shareholders at the annual meeting in August,
shares in the three companies will continue to be traded on the Stock Exchange.
Directors anticipate releasing a detailed report to shareholders in relation to their options at the time the notices
calling the annual meetings are posted.
Directors advise shareholders to make an informed decision in relation to the value of their shares and the actions they
take. The advice of Directors is to consider carefully the notice of meeting and the accompanying information to be sent
While there will be some costs associated with winding up the companies, a good rule of thumb shareholders can use to
estimate the value of their shares is the net asset value of each company. Guardian Trust, updates and publishes the net
asset value weekly and will continue to do so up to the date of the proposed annual meeting.
The net asset values at 19 June, 2001 were:
Property Leaders Australia $1.03 per share
Property Leaders Australia & New Zealand 97 cents per share
Property Leaders New Zealand 82 cents per share