The GPT Group says it’s now sold $700 million of non-core assets after a string of deals involving unwanted tourism-related assets.
The company last Friday another set of write-downs, including more than $1 billion in getting rid of the most unwanted asset of all, the European property venture with Babcock & Brown.
It said yesterday that the latest sales involved the disposal of a number of the resort assets in the Hotel/Tourism portfolio and the sale of the Group’s 80% interest in the Hamburg Trust business.
"To date GPT has sold, or entered into conditional agreements, to sell the following resort assets:
Cradle Mountain Lodge, Silky Oaks Lodge, Dunk Island Resort, Bedarra Island Resort, Lizard Island Resort, Heron & Wilson Island Resorts, El Questro, Kings Canyon Resort (GPT’s 46% interest), Alice Springs Resort and Wrotham Park Lodge.
"The assets have been sold to a range of purchasers and settlement on individual assets has either occurred, or is expected to occur within the next three months.
"Proceeds from the resort sales total $84.9 million (representing a 40% discount to December 2008 book value).
"The sale proceeds will be used to reduce GPT’s borrowings and will result in a small reduction in pro forma balance sheet gearing. The sale process for the remaining hotel and tourism assets; Brampton Island Resort, Ayers Rock Resort and Four Points by Sheraton continues to progress.
"The sale prices achieved for each of the assets will be reflected in the carrying values of each of the assets as at 30 June 2009 and were included in the anticipated asset revaluations as at 30 June 2009 announced on Friday 31 July.
"Further to the announcement of the sale of the Alliance portfolio (previously warehoused within Hamburg Trust) in June 2009, GPT has now sold its 80% interest in the Hamburg Trust business.
"Hamburg Trust is a closed end fund platform established by GPT and Hamburg Trust management in July 2007. GPT’s interest in the platform has been sold for a nominal sum against a valuation at December 2008 of zero.
"These sales bring the total of assets sold since January 2009 to approximately $700 million."
No details of the net realisable value of the various assets were given.
Chief Executive Officer, Michael Cameron, said: “We are focused on the execution of our strategy to exit the non core portfolios and are pleased with the progress to date. The Group continues to progress the sale of the remaining non core assets and will provide a further update with GPT’s Half Year Results on 27 August 2009.”
Last Friday GPT said it expects to record valuation reductions for the period January 1 to June 30, 2009 of approximately $560 million across its core Australian real estate holdings and approximately $230 million across non core assets.
"GPT will also record a writedown of approximately $1.16 billion in its investment in the Joint Venture with Babcock & Brown ("Joint Venture").
"This represents a 6.2% reduction in the December 2008 book value of the Group’s core portfolio of direct and equity accounted real estate investments. The non core asset values represent a 15.2% reduction to December 2008 book values. On this basis, gearing at 30 June 2009 is expected to be approximately 23%.
"In addition to the property revaluations and writedown of the Group’s investment in the Joint Venture, GPT also anticipates a mark to market gain of approximately $590 million on its currency positions and interest rate derivatives for the six month period," the company said.
GPT shares ended down 1.5 cents at 51.5 cents.
Meanwhile embattled paint maker, Wattyl Ltd has appointed a new CEO after the incumbent, John Nolan, decided not to extend his fixed-term contract beyond its expiry in October.
Wattyl said in a statement to the ASX yesterday that the new CEO would be Tony Dragicevich who takes over from October 19.
Mr Dragicevich would be employed under a continuing contract with no fixed term with annual remuneration beginning at $700,000, the company told the ASX.
Wattyl said Mr Dragicevich was an experienced chief executive who has been involved in the turnaround of a number of businesses.
"He brings to Wattyl both significant restructuring experience and an understanding of marketing and retail channels," Wattyl said in a statement.
"Mr Dragicevich has been general manager of Tasman Insulation Australia for the Carter Holt Harvey Group, chief executive officer of the Red Paper Group, and most recently was chief executive officer of Caroma Dorf, a division of homewares company GWA International Group."
Mr Dragicevich will join the Wattyl board on October 19, and there would be a transition period with Dr Nolan, the company said.
Wattyl shares closed down half a cent at 78 cents yesterday
And Melbourne-based printing and distribution company PMP says it has settled differences arising from former chief executive Brian Evans’ abrupt departure in January.
Mr Evans left suddenly on January 28 with little explanation from the company and he was suing PMP for a $1.56 million termination payment.
PMP says their differences have been amicably settled.
"Both sides have agreed to a confidentiality clause as a consequence of which no further statements will be made," PMP said in a statement to the ASX yesterday.
PMP shares where unchanged yesterday at 42 cents.
