Shareholders to Resist GPT’s Split Plan

Submitted by Jim Thesiger on 31 July, 2009 - 06:42

GPT Group’s (GPT) plan to split up its troubled listed property trust’s $6 billion worth of toxic Babcock & Brown joint venture might face resistance from some of the key investors as a large number of fund managers of property security who has invested money in the oldest property trust of Australia will not be able to own stocks in an unlisted trust. On Thursday, GPT authority declared that it was considering multiple options to deal with its troubled join venture and one of them was to splitting up the joint venture into separate structures.

According to Mr. Wheatley, Goldman Sachs JBWere head of Australian real estate investment trusts, newly appointed chief executive of GPT, Mr. Michael Cameron might go for making an announcement regarding the split-off of the joint venture at the market update of the trust on Thursday. Goldman stated that shareholders might also seek answers from the management of GPT regarding an outline of the timing and probability of the sale of US seniors living business, some hints on whether the company would turn into a buyer for the big ticket assets of the market, a timeline for the sell of its bulky goods & hotel portfolio and whether the group will consider to enter the European fund management market.

Justin Blaess, the head of property securities with ING Asset Management mentioned that speculation is there that it is now too late for the group to consider a split off for the trust. He also added that the group managed to lower its gearing by raising equity worth of more than $3 billion. It is to be mentioned that struggling Babcock & Brown have enjoyed a handsome amount of management fees from the joint venture portfolios which were purchased at the high times of the market.