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| Subject: Saville a winner in Glasgow airport deal 19 March 2004 Triple Witch | |
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Author: Mr Saville owns 27 per cent of ERG through his Ingot group. |
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Date Posted: Thursday, March 18, 09:39:14am In reply to: March 16, 2004 's message, "No more write-down shocks, says ERG chief" on Thursday, March 18, 09:30:09am Saville a winner in Glasgow airport deal 19 March 2004 Long-time Infratil director Duncan Saville will be a winner despite a company he controls having to accept a lower price for its 23 per cent interest in Glasgow Prestwick airport yesterday. The wealthy, low-profile British businessman has interests on both sides of the transaction. Yesterday, Utilico Investment Trust Plc (UITP), controlled by Mr Saville and his associates, accepted an 8 per cent cut in the original STG11.7 million ($NZ32.9 million) price Infratil had agreed to pay. The stake is for the remaining 23 per cent of Glasgow Prestwick that Infratil does not already own. UITP, listed on the London and New Zealand exchanges, owns 15.6 per cent of the New Zealand listed company Utilico International Ltd and interests associated with Mr Saville own another 36 per cent. Utilico International has the same phone number and office in Wellington as Infratil. When Infratil warrants convert next Friday (March 26) Mr Saville will own 20 per cent of Infratil and will be the largest shareholder. He also owns 30 per cent of Morrison & Co, the company which manages Infratil. Morrison & Co owns 10.8 per cent of Infratil but that will dilute to 9.3 per cent after the warrants convert. Infratil shares dropped 6 per cent this week on a profit warning put out by Glasgow Prestwick and Infratil said it was reviewing its option to buy out the minority stake. Yesterday, Infratil shares recovered 6 cents to $2.60. Infratil's independent directors former Finance Minister David Caygill, Kevin O'Connor, David Newman, and John Peterson demanded a new valuation of Glasgow Prestwick and, after that, UITP agreed to a revised purchase price of STG2.06 ($NZ5.80) per share against the former price of STG2.34/share. Infratil and UITP jointly bought Glasgow Prestwick in January 2001 with Infratil taking a 67 per cent stake, UTIP taking 23 per cent and Scottish company Ominiport taking 10 per cent. Infratil shareholders will vote on the new proposed transaction on March 24 and directors support the purchase. Accountants Ernst & Young, which prepared an appraisal report on the acquisition, assesses the purchase as fair. Infratil said the potential for improved returns through having 100 per cent ownership were confirmed on the new review. The airport is expected to post ebitda (earnings before interest, taxes and depreciation) of STG4.5 million for the year ended March 31 – about 10 per cent below the figure for the previous corresponding period. Its main user, Ryanair, last month issued a shock profit warning after it was ordered to repay millions of euros received in subsidies from Belgian authorities, following a European Commission ruling. Ryanair's share price has dived 40 per cent last January. For Mr Saville it is not the first time he has been involved with a New Zealand listed company which has bought assets from companies in which he, or his family trusts, have essential control. Last year, Dairy Brands, now renamed Finmedia, which also uses the same phone number and office as Infratil and Utilico, bought British company Hemscott Plc, which supplies business and financial information in Britain. Mr Saville's interests control over 81 per cent of Finmedia. The former corporate dairy farmer – which cashed up its farms at the height of the dairy boom – bought 50.01 per cent of Hemscott for $7.5 million. A significant stake of Hemscott was already controlled through Saville family trusts. Dairy Brand shareholders in 2002 contracted Mr Saville to provide investment and administrative services. At the time Kanawa Ltd, a private investment company registered in the Isle of Man owned 3.61 per cent of Hemscott, and Co-operation Retirement Benefit Fund Ltd, a private investment fund registered in Malaysia, owned 31.79 per cent. Both companies are reported to be controlled by a family trust, of which members of the Saville family are beneficiaries. Other Dairy Brands associates with shares in Hemscott included Hemscott director Charles Jillings, also a Utilico director, and a trust of which Mr Jillings was a potential beneficiary. Before the purchase, Hemscott posted a pre-tax loss in 2002 of STG2.4 million on turnover of STG5.16 million. Utilico International's main investment is a small stake in listed Australian company ERG, which in November 2002 Mr Saville as Utilico chairman said had "an extremely positive up side". Just over three weeks ago, Mr Saville, the controlling shareholder of ERG had to make a $A36.2 million ($NZ41.5 million) emergency loan to ERG after what The Age newspaper of Melbourne called "another round of asset write downs (that) blighted the December half-year results". "They came after two disastrous years in which ERG has declared losses of $A442 million and reduced the balance sheet to a net worth of $153 million, little more than half the 2001 peak of $273 million." Mr Saville owns 27 per cent of ERG through his Ingot group. [ Next Thread | Previous Thread | Next Message | Previous Message ] |