PrimAcq down $5.5 M on Equiticorp buy

Press, 7 December 1987, Page 33

PrimAcq down $5.5 M on Equiticorp buy

PA Auckland PrimAcq Holdings has unrealised book losses of $5.5 million on Equiticorp Holdings shares it took up in a placement in September.

The chairman of PrimAcq, formerly Rainbow Properties, Mr Tony Agar, told the annual meeting the shares cost 347 c each, with half the money paid immediately and half due on February 2.

At the time, Equiticorp shares were trading at about 360 c a share. If the price did not rise by the February payment date, PrimAcq will face significant book losses. But, Mr Agar said, PrimAcq was not under pressure to sell and intended to hold on to the shares.

If all PrimAcq’s unrealised losses and unrealised gains were brought to account the

company would be ahead by about SIOM, said Mr Agar. The company’s property operations are largely in Wellington around the

Majestic Centre site on which a 30-storey building will be constructed. At 120 metres, it will be the tallest building in New Zealand.

Mr Agar said PrimAcq was close to signing an agreement to lease the building, and work would start once this deal was confirmed.

There was only one small aspect of the contract to be negotiated, and the deal could be official early next week. Mr Agar said the site, which had cost S27M, had been revalued in January ats44M. Any suffering in the property sector would be felt mainly by those companies with buildings on the fringes of cities, rather than those which had purchased central business district sites, he said.

PrimAcq was still holding a 23 per cent interest in Australian listed finanacial service company Finadco, which was trading satisfactorily. PrimAcq had also lifted its stake from 25 to 100 per cent in Securities Corp, and was expecting a profit contribution from this investment adviser and financial planner.

A final dividend of 4c a share was approved, payable December 14.

Mr Agar said Governments for the first time had a vested interest in seeing sharemarkets' recover and had the power to make it happen. He told the company’s annual meeting that, where others seem frozen into immobility by the severity of the crash, politicians could be more inclined to take the steps to aid a recovery.