Bethunes Investments shareholders will vote next month on a deal to use its NZX listing as a vehicle for freight and logistics firm Transport Investments Ltd to go public while shifting its remaining assets into a new entity.
The company’s 335 shareholders will meet in Auckland on Dec. 5 to consider the reverse listing which if approved will see them own 0.6 per cent of the transport group, which has an enterprise value of $200 million, and keep their relative stakes in a new holding company – New BIL – which will house Bethunes’ existing investments valued at about $486,000.
Independent adviser Grant Samuel’s report judged the deal’s terms were “fair and reasonable to the shareholders of Bethunes not associated with TIL” and that “the proposed transaction is in the best interests of Bethunes given the options reasonably available to Bethunes at the current time.”
“The board considers that completing the transactions will add value for Bethunes shareholders as it presents them with the opportunity to own a shareholding interest in the transport and logistics business of Transport Investments Limited following the acquisition of that business by Bethunes, while also retaining their interest in the business and assets of Bethunes via BIL 2016 Limited,” chair Chris Swasbrook said in a statement.
If Bethunes’ shareholders approve the deal, the NZX-listed firm will rename itself TIL Logistics Group and replace the board, with Trevor Janes lined up to chair the new directors. He would be joined by fellow independent directors Lorraine Witten and Danny Chan, executive director Jim Ramsay and non-executive director Greg Kern.
TIL had planned to list through an initial public offering, but gave up on those plans in mid-2017 after being advised “market conditions were not conducive, in part because of the New Zealand general election and likely resulting market uncertainty.” It began discussions with Bethunes in August.
Bethunes had planned an earlier reverse listing with Westgate Power Centre-subsidiary NZ Retail Property Group, however, that fell through when the real estate investor decided it wasn’t a good time to raise capital.
The Grant Samuel report says if the deal isn’t approved, Bethunes will remain a listed shell company seeking investment opportunities, but isn’t likely to try reverse listing another company again. If it is approved, Bethunes plans to relist the new entity.
The documents show TIL expects to report a statutory loss of $10.3 million on revenue of $327.8 million in the year ending June 30, 2018, turning to a profit of $11.1 million on revenue of $335.5 million the following year, when it would expect to pay dividends of 7.4 cents per share, representing a gross yield of 6.8 per cent.