Paynter sells stake

Press, 14 September 1988, Page 37

Paynter sells stake

By

MARK REYNOLDS

The Christchurch-based Paynter Corporation has sold its 49 per cent shareholding in Sydney property development company, Condux Corporation. The unfortunate irony of the sale is 'that profits from Condux kept Paynter out of the red for the six months ended April 6. Before its $1,342,000 share of profit from Condux, Paynter had a loss of $427,000 for the interim. Condux was sold to reduce some of the holding costs of the unsold 17storey Clarendon Tower office block, Paynter’s executive chairman, Mr Richmond Paynter, said yesterday. The $5O million office tower was to have been sold by Paynter on completion, but the building was caught up in the commercial property market downturn. The proceeds from the sale of Condux will go towards retiring some of the high-interest debt on

the tower. “It will help consolidate the group’s balance sheet by reducing debt,” Mr Paynter said. He added that it was group policy to have direct control over all its assets, and that control of its Australian property arm , was not possible from the Condux shareholding position. . “We prefer to be in a position to be able to access cash flow directly and have direct control over projects and investments. Our minority shareholding in Condux .did not make that possible.” Paynter bought the 49 per cent holding in May, 1987, and after holding costs and other expenses the sale yesterday represented a profit on the investment, Mr Paynter said. Paynter had paid about SI2M for its shareholding. The stake was sold back to its original holder, Conduce, Ltd, which now fully owns Condux.

Mr Paynter said that despite the divestment, Paynter would continue to examine business and property development opportunities in Australia and New Zealand. If the Clarendon Tower was sold, Paynter’s equity stake in the building could wing its way to Sydney. ,

“We have enjoyed a successful and profitable association with Condux, from which we have gained considerable experience of offshore property activities and an increased knowledge of the Australian property market. This will stand us in good stead when we embark on future property development ventures. “It is now desirable for the group to become directly involved in development opportunities over which we exercise full control.” However, the company’s first priority is to sell the almost fully let Clarendon Tower.