DNZ, the owner of The Warehouse, in MacLaggan St, and part owner of the Remarkables Industrial Park, in Queenstown, was created in September last year from the merger of four property funds that had been exclusively available to clients of financial advisory firm Money Managers, now MMG Advisory Partners.
The company is seeking to raise $130 million through a $30 million priority pool for existing shareholders and a $100 million offer to institutions and placements through sharebrokers.
There is an ability to accept $10 million of oversubscriptions.
The offer is fully underwritten by Goldman Sachs JBWere (NZ).
Mr Timms said the company would move straight into the NZX-50 on listing.
The 82c a share placement price was a significant discount to the value of the company and should prove a popular listing with investors.
"It's an interesting mix of property ranging from office, industrial and retail. Depending where it sits in a portfolio, people have started to look at these things as an alternative to owning property."
Although not blue chip, DNZ had a "reasonable" cross section of property, Mr Timms said.
Company chairman Tim Storey told a media conference the proceeds of the capital raising would be used to reduce existing bank debt and fund the termination and assignment of existing management arrangements.
DNZ had moved to internal management arrangements and the proposed listing was the best alternative for existing shareholders and the longer-term strength of the company.
"Our board views this as an appropriate time to address the company's capital structure and we believe it is important to reduce our gearing to levels more appropriate in the current market and to levels that would ensure support from institutional and new investors," he said.
Mr Timms said the 35% gearing was still on the high side for a company like DNZ.
The biggest difference was that the company was not a trust, with a layer of external management.
DNZ chief executive Paul Duffy said market interest had been increased by the decision to terminate the management contract held by DNZ Management Ltd and internalise the management function.
The independent directors had the management contract independently valued.
The shareholders of the manager would reinvest about 50% of the proceeds from the termination payment into shares that would be held in embargo for up to 18 months.
The listing of DNZ had been a long-term vision for Mr Duffy, who had been chief executive since 2001.
"The listing was a logical next step following the amalgamation process we have been following for the past nine years. When I first joined the fund there were multiple separate trusts and funds trading under the same umbrella."
At a glance
- DNZ seeking $130 million for NZX listing.
- Offer opens November 23.
- Offer closes December 11.
- Expected listing December 17.
