PGC - Licenced to Bank

[percy]

I can assure you that it most certainly won't be them, Scotty. PGC "Sell" signals fired literally years ago - and it's been in an accelerating downtrend ever since. No TA would go anywhere near junk like this - especially given the complete absence of any Buy signals.

One clue we have here is the falling On Balance Volume indicator. This indicates distribution (larger holders are selling to smaller holders). We can only assume they are selling at 33/34 cents because they fear that PGC will continue falling.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/PGC23.gif
Don't think I have ever sobered up so quickly in all my life !!! Would probably pass a breath test.!! Phaedrus as always thank you for the chart.

[percy]

The record date for the when PGC holders will receive their BSH shares? Is it long past? I missed that. When was it?

No,no record date has been announced. belgarion,you ask good questions,PGC directors should have given shareholders some answers,as far as I can remember we were told we would receive BSH shares in March.

[Breastwork]

Just a thought but maybe the whole idea is to pump up the volume of BSH thereby reducing the perceived value of Perpetual and its associated entities, de-list said stock, then place an offer that will be accepted by the (depleted) directorship.
More of a concern to shareholders (other than the bath we've taken in the last year) is the recent drop in share value, as a rumored result of major investors becoming wary of GK's motives. At what stage will this be queried?

[SCOTTY]

Thanks Phaedrus. I appreciate your reply and sentiments. I do have a lot of respect for your charts, work and advice and I do look at charts for help at times. However, I do think that at times when assets are seriously undervalued or ignored it is time to go on the fundermentals. This is why I have been buying PGC @ 34/36c

Regards

[bull....]

Actually said this one was a dog too and will probably keep going lower, I dont expect BSH shares too save S/H from losing money on the whole deal as mentioned earlier marac got lot of fleas.

[bull....]

Bull do you agree that unless they allocate 1/1.5 there will be no profit from buying PGC for anyone since the rights issue.

I dont see any value in any BSH shares given to you as PGC has given its value away

[tim23]

Well the Wrightson factor comes in to play given todays news.

[ETC]

Bull i'm like you i don't see any value left in PGC once they've off loaded their BSH shares. Though i can't bring myself to sell. I'm hoping there's some value that i'm not seeing in the Perpetual Group.

Surfersteve i think we'll get 1 BSH share for every 5 PGC shares we hold. PGC are selling a portion of the BSH shares to institutions to help fund their "future plans", whatever they may be.

[percy]

with what 81 million in booty from PGW likely and a lock up agreement in place is this the Booty that sets up the bank?

or sells down debt and sets up the retail branchs.

81 million does a long way at this point.

If you go to post 442 on this thread,and read it,then read from there on you will find you are a lot better informed,and have a better understanding of the issues.You can then do all the calculations your-self and stop others from having to repeat the exercise for you.

[percy]

yes i had read your posts earlier and these were excellent. brillant from scott as well. being an accounting person who designs software i was thinking about how this would look from the share ledger. i dont see any point in buying 5 shares to get one free unless the actual share prices gives me a profit. not a promise of a future profit with a lot of ifs. thats why milford sold.

lots of ifs.10,000 PGC shares today will entitle you to 2,500 to 2650 BSH shares.You will retain your holding of PGC.At present that holds realestate loans ,PGW shares,parts of perpectual trust [including Torchlight and other funds].So what are they worth,or what they are sold for will determin what value the market will put on PGC shares.At present it looks about 1.5 cents to 7cents.At present Milford were right.However, they may end up being wrong!!!????

[percy]

When PGC flogg off 20% of their BSH holdings to instos, what price do you expect the instos to pay? ... I'm 99% certain it'll be at a significant premium to today's close at 78 cents which is mainly derived from building society account holders selling and the majority of them probably never owned shares in their lives and are likely to be as well informed as those that sold to Whimp in his rediculos low-ball offer!

Fun and games ... :)

It is not a done deal that PGC will flogg off any BSH shares to institutions. I will repete that.It is not a done deal that PGC will flogg off any BSH shares to institutions.The PGW deal, should it go ahead will mean more money for PGC, and so the need of extra cash deminishes.therefore PGC shareholders could/will get more BSH shares.Go back to my post 541.

[SCOTTY]

could you elborate on the 22 cents for BSH formula. as i see it sometime ago it was suggested that the ratio for shares might be as high as 1/4 and this would mean that for many purchases of the shares they would be better off to have sold PGC at 40.

BSH trades at .88, so if you buy at .33 and get a 1/2 or 1/3 share split where is the profit in this? can some expert explain.
many thanks

steve

Hi Steve.

The way I see it is this:

The asset backing (book value) of PGC is I think about 52c per share. It will be more if the PGW stake sells above 60cps.

Each PGC share currently has between .25 to .265% of a BSH share. The NTA of the BSH shares is 88c (they are below this today) at say .25%, this would account for 22c of each PGC share asset backing. After the distribution of the BSH shares (@ say .25% you should get at least 1 BSH share for every 4 PGC shares) to the PGC shareholders, the NTA of PCG should drop by the 22c and the shareprice should also reduce by this 22c. On todays price of 35c, PGC should drop down to 13c. The asset backing of PGC would be 52c less the 22c = 30c and theoretically costing you only 13c.(on todays price of 35c). I think the 30c assets backing is very real and probably undervalued.

Because the BSH market is now established and there is a good chance of selling the PGW stake I don't see any need for PGC to place any BSH shares which in my opinion rightfully belong to the PGC shareholders and should be distributed accordingly. There would be cash from the PGW sale in PGC for future divies and other business oportunities or for distrbution to the poor old long suffering PGC shareholders.

This is just my opinion.

Regards

[percy]

Hi Steve.

The way I see it is this:

The asset backing (book value) of PGC is I think about 52c per share. It will be more if the PGW stake sells above 60cps.

Each PGC share currently has between .25 to .265% of a BSH share. The NTA of the BSH shares is 88c (they are below this today) at say .25%, this would account for 22c of each PGC share asset backing. After the distribution of the BSH shares (@ say .25% you should get at least 1 BSH share for every 4 PGC shares) to the PGC shareholders, the NTA of PCG should drop by the 22c and the shareprice should also reduce by this 22c. On todays price of 35c, PGC should drop down to 13c. The asset backing of PGC would be 52c less the 22c = 30c and theoretically costing you only 13c.(on todays price of 35c). I think the 30c assets backing is very real and probably undervalued.

Because the BSH market is now established and there is a good chance of selling the PGW stake I don't see any need for PGC to place any BSH shares which in my opinion rightfully belong to the PGC shareholders and should be distributed accordingly. There would be cash from the PGW sale in PGC for future divies and other business oportunities or for distrbution to the poor old long suffering PGC shareholders.

This is just my opinion.

Regards

Thanks SCOTTY. Approx 43cents buys a $1. Beats half price day at ballantynes.!!!!!

[mouse]

Thanks SCOTTY. Approx 43cents buys a $1. Beats half price day at ballantynes.!!!!!
That is the point. It does not really matter if we get 20 shares or 2 in BSH. The shares we do not get in BSH leave more value in Pyne Gould. At 36cents a share at present, or lower, they are a steal. Roll up!, Half Price Sale.

[percy]

that is of course assuming that BSH is a success and stays at .88, only then will 43 cents buy a dollar.

Looks as though my record for getting it wrong stays intact.!!! With BSH holding SP dropping we are,or must be getting close to only half price,or more.

[SCOTTY]

NZX Market update today has the information that we have been waiting for:

http://file.nzx.com/000/101/4635101.pdf

[percy]

NZX Market update today has the information that we have been waiting for:

http://file.nzx.com/000/101/4635101.pdf

A good announcement.All PGC's BSH shares to shareholders.Loved Real Estate CreditGroup statement " Surplus assets will be realised.and it is intended that any resulting proceeds will be returned to shareholders."

[percy]

percy, hang in there mate. :)
Thank you.!!!

[Grantas]

Reading the market update I have difficulty in getting my head around the "P note" and its repayment. Its issued by a wholly owned subsidary of PGC to a wholly owned subsidary of BSH and is to be repaid by proceeds from the sale of PGW shares (wholly owned by PGC). Anybody explain how this works?

End plan is for PGC to have the Perpetual Group (587m under management) and the Torchlight Group (no idea of what it manages), with PGC being run by four directors. I have a concern that if the share price doesn't stay realistic to asset value then this company may eventually go private.

[percy]

Good point, i dont think they would be a very popular group of directors if that ever happened and people lost millions are after already losing millions. The P Note is a bit like an on loan between a company, a shareholder trust and beneficaries.

on another subject it reminds me how you would avoid the 33% tax rates on trusts , now if you want to avoid the tax rate on trusts thereby creating on demand loans to the other party who might be being tax at a lower rate, say the B type person in the trust, If you are the both the T person and the B person then you could create an on demand loan to yourself and avoid a **** load of tax.

Glad you can work it out.I thought Marac owed PGC $30mil,that's how wrong I am.!!!!!!

[percy]

More on PGC on stuff website this morning,article headed PGC to remain listed for now.

[SCOTTY]

More on PGC on stuff website this morning,article headed PGC to remain listed for now.

http://www.stuff.co.nz/the-press/business/4638888/PGC-to-remain-listed-for-now

[ETC]

An article on stuff yesterday quoted the value of the wealth management and trustee business at 60 to 65 million.

http://www.stuff.co.nz/business/industries/4653354/Shakeup-just-end-of-beginning-says-Kerr

[percy]

An article on stuff yesterday quoted the value of the wealth management and trustee business at 60 to 65 million.

http://www.stuff.co.nz/business/industries/4653354/Shakeup-just-end-of-beginning-says-Kerr
Thank you for the link.I saw the article in The Press and thought Vance had it wrong.

[percy]

The NTA of PGC is before the bank. percy approx 50cents.
NBR 60cents.
IRG 56cents.
Lets take IRG figure.We know there is 803.9 mil shares [according to NBR] so 56 times 803.9 is $450.184 mil. We also know slightly less than $200 mil of assets went into the bank,so we can work out there is/are approx $250 mil worth of assets left in PGC.OK adjust the PGW holding,deduct this, that and the other thing does not leave $60 to $65mil.Adjust $50mil ? still $200 mil of assets,or $135 to $140mil more than Mr.Vance thinks.Either he is wrong,or been miss quoted.
Lets wait for SCOTTY to give us the correct answer.!!!!

[SCOTTY]

Hi Percy

I,m sticking with my figures in post 544 except that I did not allow for the "P Note" I think the NTA of PGC after distributing the BSHL holding would be 30c plus. This includes the holding in PGW. At 30cps x 808m = $242mill, less the $27mill "P Note" to BSHL = $215 mill left in PGC. The NTA of PGC will then be at least 27cps.

Cheers

[percy]

Hi Percy

I,m sticking with my figures in post 544 except that I did not allow for the "P Note" I think the NTA of PGC after distributing the BSHL holding would be 30c plus. This includes the holding in PGW. At 30cps x 808m = $242mill, less the $27mill "P Note" to BSHL = $215 mill left in PGC. The NTA of PGC will then be at least 27cps.

Cheers
thanks SCOTTY.
As always I prefer your figures.I note your $215 mil left in PGC is a"little" higher than Mr.Vance's $60 to $65 mil.In fact $150mil higher.Mr.Vance 'must have been miss quoted". Yeah right.!!

[Xerof]

Perhaps Mr Vance inadvertantly quoted the real number, not the speel handed out in Broker presentations?

anything and everything is possible....

By the way, contrary to Balance's assertion that the institutions were scrambling over each other to get a hold of BSH shares no longer coming their way (no volume as far as I can see), could it actually be that institutions don't want a piece of the action, and so the P Note had to be repaid by using funds from acceptance of the "lowball' offer for PGGW?

spin doctors at work?

anything and everything is possible.....

[percy]

Perhaps Mr Vance inadvertantly quoted the real number, not the speel handed out in Broker presentations?

anything and everything is possible....

By the way, contrary to Balance's assertion that the institutions were scrambling over each other to get a hold of BSH shares no longer coming their way (no volume as far as I can see), could it actually be that institutions don't want a piece of the action, and so the P Note had to be repaid by using funds from acceptance of the "lowball' offer for PGGW?

spin doctors at work?

anything and everything is possible.....

I do not believe Mr.Vance's figures.I do beleive that Balance is correct,because the institutions will realise BSH will in a short period of time be included in the NZX 50 Index.I do believe Mr.Vance has been mis quoted.To be out $150mil ? I believe my figures,and I am very pleased to accept SCOTTY'S.What figure do you come up with?

[Xerof]

I await a correction in The Press then....

I have no numbers percy, nor has anyone provided me any information, nor do I have access to broker notes. I just raise some alternatives that might or might not be relevant.

things are never as they seem, thats all, especially when it comes to finance companies at the moment.

[percy]

I await a correction in The Press then....

I have no numbers percy, nor has anyone provided me any information, nor do I have access to broker notes. I just raise some alternatives that might or might not be relevant.

things are never as they seem, thats all, especially when it comes to finance companies at the moment.

The reason I brought a computer was because The Press got it wrong too often!!! or were late reporting announcements.
We will find out in due course.I do believe the figures I am working from because PGC wanted the bank so much and had a capital raising they could not afford to publish misleading figures.

[Jaa]

I have been following these discussions with interest and have attempted to create my own model of PGC's NTA in a publicly editable Google doc. Feel free for all to edit, play around and hopefully improve it!

I still need to verify a few assumptions, specifically regarding the $30m loan from PGC to BSH or was it a $27m loan going the other way?

PGC NTA Model (https://spreadsheets.google.com/ccc?key=0AmxY149UyqSMdDAtZHBSWlZ0SlRsVEEzNXFPTFFPV VE&hl=en&authkey=CIeXkboM)

Interestingly, shocking my model with different assumptions doesn't seem to make a lot of difference. The NTA per share of PGC seems to be between 50 and 56 cents about a 50% discount from the current share price. Which is about what other analysts and sites have.

The key drivers for the share price in the short/medium term clearly are:


BSH share price
Whether there is another higher bid for PGW

[percy]

I have been following these discussions with interest and have attempted to create my own model of PGC's NTA in a publicly editable Google doc. Feel free for all to edit, play around and hopefully improve it!

I still need to verify a few assumptions, specifically regarding the $30m loan from PGC to BSH or was it a $27m loan going the other way?

PGC NTA Model (https://spreadsheets.google.com/ccc?key=0AmxY149UyqSMdDAtZHBSWlZ0SlRsVEEzNXFPTFFPV VE&hl=en&authkey=CIeXkboM)

Interestingly, shocking my model with different assumptions doesn't seem to make a lot of difference. The NTA per share of PGC seems to be between 50 and 56 cents about a 50% discount from the current share price. Which is about what other analysts and sites have.

The key drivers for the share price in the short/medium term clearly are:


BSH share price
Whether there is another higher bid for PGW


Good work.
May I suggest you phone Bruce Irvine (03) 3771956 and ask him about the loan.I must admit I thought Marac owed PGC not the other way round.You may ask him about NTAs.I would mention Mr.Vance's valuation and see what he has to say.

[SCOTTY]

Hi Jaa

Yes, good work Jaa. One correction please. Of the 300mill BSHL shares on issue, PGC ownes 72.2% which is about 216mill (not 300mill)

Cheers

[Jaa]

Hi Jaa

Yes, good work Jaa. One correction please. Of the 300mill BSHL shares on issue, PGC ownes 72.2% which is about 216mill (not 300mill)

Cheers

Thanks Scotty, you are quite right.

Someone has updated the model (https://spreadsheets.google.com/ccc?key=0AmxY149UyqSMdDAtZHBSWlZ0SlRsVEEzNXFPTFFPV VE&hl=en&authkey=CIeXkboM#gid=0) with this and the negative 27m loan. Fast work, thanks people.

These make a big difference to the NTA with now sits at just over 35 cents. Looks like the market has PGC's price right then?

[percy]

Thanks Scotty, you are quite right.

Someone has updated the model (https://spreadsheets.google.com/ccc?key=0AmxY149UyqSMdDAtZHBSWlZ0SlRsVEEzNXFPTFFPV VE&hl=en&authkey=CIeXkboM#gid=0) with this and the negative 27m loan. Fast work, thanks people.

These make a big difference to the NTA with now sits at just over 35 cents. Looks like the market has PGC's price right then?

The sum of parts must add up to the known NTA of PGC of 52cents to 60cents.until it does that it is wrong.

[ETC]

As a side note there might be more than 216 million shares distributed to PGC shareholders. In PGC's market update they talked about using the PGW money to provided capital to BSH for more shares. If this happen I wonder how many shares they'll get?

I always thought that PGC should have kept its shares in BSH and then sold PGW and used the capital to buyout CBS and SCBS shareholders. That would have left PGC with a bank and wealth management company that the board could align with each other.

[winner69]

Somebody been playing with Jaa spreadsheet?

When I looked the value of the PGC Rump (I take this is the value of things left after the wash up) is said to be $160m

Question would be how do you arrive at $160m for these ... seems a lot for a Fund with $500m under management that made $6m last year and a Trust Co

The published NTA of 54 cents is pretty old now and ties in with the annuals ... has anybody seen any proformas since the spln off of BSH

[Xerof]

take 100m off the rump......

I checked with a (trusted) broker friend who told me most analysts put it at 60 to 65m - I think he said Forbars were at 65m

happy to be corrected of course, but 160m is blatant ramping

[Balance]

Somebody been playing with Jaa spreadsheet?

When I looked the value of the PGC Rump (I take this is the value of things left after the wash up) is said to be $160m

Question would be how do you arrive at $160m for these ... seems a lot for a Fund with $500m under management that made $6m last year and a Trust Co

The published NTA of 54 cents is pretty old now and ties in with the annuals ... has anybody seen any proformas since the spln off of BSH

Simplistically, reduce NTA by 1.5c dividend and another 4.1c for the $33m write-down etc as highlighted by the company on 24 Dec.

So you end up with NTA of 48.5c.

Best way however of looking at PGC now is to break up its share price into component parts.

At today's share prices of BSH, PGC and PGW - the PAM residual assets of PGC = $26m.

Is PAM worth $26m? PAM's investments in EPIC & Torchlight alone = $30m. Then, there's the residual assets of RECT of $78.3m? Question then is how much is the Funds Management operations worth - close to $600m under management.

[percy]

Balance.
Good boy, go to the top of the class.About time some one other than SCOTTY posted some sense. A lot better than some figure off the top of some broker's head.
thank you.

[Xerof]

Good, thanks Balance. Like getting blood out of a stone but finally got something concrete from someone with what seems a very good insight on this group of companies. You certainly either love em or hate em...lol

SCOTTY, you erred to the high side with the P Note when quoting a residual NTA for PGC. Does that also mean you have erred to the low side with the 88 cents NTA figure for BSH, or was that in fact already included?

Has the Vance statement/misquote been corrected yet?

[percy]

Good, thanks Balance. Like getting blood out of a stone but finally got something concrete from someone with what seems a very good insight on this group of companies. You certainly either love em or hate em...lol

SCOTTY, you erred to the high side with the P Note when quoting a residual NTA for PGC. Does that also mean you have erred to the low side with the 88 cents NTA figure for BSH, or was that in fact already included?

Has the Vance statement/misquote been corrected yet?
Xerof,
SCOTTY,Percy and Balances figures,conculsions are all very close .We have been following this unwind for months.I know I have found it interesting and have brought more PGC shares for both mywife and myself.If you follow our posts for a couple of months you will understand we have given it a lot of thought.
Should you have questions about Mr.Vance's statement,ring him,(03)3798420 or toll free 0800 10 40 50 or cannot understand movements of assets phone Bruce Irvine (03)3771956. The only insight we have is published statements,and accounts.If there is more than is published, please share.However broker comments carry very little weight with me.What Irvine has to say would be correct.

[Xerof]

I'll wait for the results announcement due on the 25th and do some DD then. Torchlight etc is all a bit on the darkside for me at the moment. The December update predicted losses all over the place, so will see how it all panned out.

You're right it is interesting, and intriguing. I found some public information yesterday which rang some bells, but am still researching........

disc: don't own, never have, but might.....

[Balance]

Exactly what's going one with PGW explains a large part of the discount. If Agria's bid fails, then PGC haven't as much cash and things change quite a bit.

Agria will get to 50% easily.

The main issue now is whether or not Agrium launches a full bid.

[mouse]

Agria will get to 50% easily.

The main issue now is whether or not Agrium launches a full bid.
I suspect Agrium have to. At 70cents if they are very keen to get the lot. Which then leaves Agria to either bid 80 cents or fail. The present valuation of PGGWrightson is not of major importance since we are in a trough. Hopefully at the bottom of it. So a bit over valuation is on the cards. Or in the stars.

[Jaa]

Ye gods TV3 is showing footage from the PGC building which has completely collapsed. Many still stuck inside. Best wishes to everyone connected with the company.

[climbtree]

I felt horrible thinking about my money as soon as I saw that. I sold all my shares at a loss of $7500 from the original price, but I'm alive so I really can't complain. I hope they rescue a lot. How do you think the market will react? Both PGC and PGW were down 3 cents as soon as I checked.

[Jaa]

NZX should stop trading in the share. Period.

[ETC]

PGC have released a statement: http://www.nzx.com/markets/NZSX/PGC/announcements/4689661/PGC-Christchurch-Staff

It looks like the business has escaped relativily unscathed but there are grave fears for staff.

The PGC building looks like rubble.

[Nigel]

"Relatively unscathed"?! Dude! Subsidiary BSH is unaffected, but I'd say there are some pretty tragic impacts on PGC as a business - the people being the major one, the buildings and disrupted operations being secondary. A terrible day for New Zealand; our thoughts are with everyone in Christchurch tonight.

[climbtree]

Definitely. I suppose insurance might cover the building losses but having something like that happen is definitely going to interfere with buisiness. Another consideration, though I think they have a wider range of shareholders now, is that the major investors are from that region. They'll need money. Last earthquake saw PGCs share price drop iirc.
It's also rather unfortunate that they've merged to form a building society after the entire country has seen their building completely demolished. Even if the company is fine, I imagine confidence of both investors and employees will take a hit. My prayers are with them.

[brucey09]

my thoughts go to all you christchurch people - care

[skeet]

My brother works for PGG, a stock agent for mid canterbury. He isnt based in chc so he was fine but will lose work mates I would think

[CJ]

Definitely. I suppose insurance might cover the building losses They dont own the building so their disaster recovery plan will be key. They will need to find new premises, get your office equipment and hopefully their servers were offsite or replicated offsite so they can get those going quickly.

The biggest impact will be their staff. Even those that are unscathed will likely be going through a lot personally, in relation to colleagues, family, friends and their own houses. You wont be focused on working long hours to get the new bank up and running would you.

[Grantas]

Just a change of topic ..anybody know the record date for the allocation of BSH shares to PGC shareholders?

[percy]

Just a change of topic ..anybody know the record date for the allocation of BSH shares to PGC shareholders?

Not announced as yet.PGC are due to report in the next few days.A previous poster said 25/2/11,but may be put off a short time.I expect a lot of information with the report.

[geezy]

NZ is really running on a spate of bad luck, i have had two holdings PRC and coincidentally PGC (P and Cs) facing really sad news of loss of life. I wish all the families involved all the best and stay strong.

[GTM 3442]

NZ is really running on a spate of bad luck, i have had two holdings PRC and coincidentally PGC (P and Cs) facing really sad news of loss of life. I wish all the families involved all the best and stay strong.

Geezy - what else go you hold - just as a warning ? ! ?

[geezy]

haha GTM3442, tell me what u own then i shall buy that :)

[GTM 3442]

haha GTM3442, tell me what u own then i shall buy that :)

geezy - by a strange fluke of chance, my only direct holdings are in SVY & TRS, I think I'm immune !

[Newman]

I felt horrible thinking about my money as soon as I saw that. I sold all my shares at a loss of $7500 from the original price, but I'm alive so I really can't complain. I hope they rescue a lot. How do you think the market will react? Both PGC and PGW were down 3 cents as soon as I checked.

Does anyone have any idea of the likely amount of money PGC, Marac, or BSH lent to the businesses and housing in Christchurch?

[percy]

Does anyone have any idea of the likely amount of money PGC, Marac, or BSH lent to the businesses and housing in Christchurch?

Sorry,I do not know.Banks and finance companys do not lend on uninsured chattles or property,so should not be a problem.I expect there will be good demand for their services from people wanting to make the most opportunities the rebuilding will offer.
To find out the answer to your question,go back to BSH and PGC announcements and they give a lot of brakedowns to what and where their loans are.

[Balance]

Sorry,I do not know.Banks and finance companys do not lend on uninsured chattles or property,so should not be a problem.I expect there will be good demand for their services from people wanting to make the most opportunities the rebuilding will offer.
To find out the answer to your question,go back to BSH and PGC announcements and they give a lot of brakedowns to what and where their loans are.

Good lending policies mean that loans must not only be secured but cover by insurance as well.

[percy]

Good lending policies mean that loans must not only be secured but cover by insurance as well.

Thanks Balance,good to have you putting into words what I mean.!!!!

[corlemar]

Hi folks, i'm relatively new to the forum, though i'd be interested to know if anyone has any thoughts on why PGC shareprice is performing so poorly in relation to NZX given the market has headed north over the past 12/18mths yet PGC share price has gone south, despite a change in management ?

[SCOTTY]

Hi folks, i'm relatively new to the forum, though i'd be interested to know if anyone has any thoughts on why PGC shareprice is performing so poorly in relation to NZX given the market has headed north over the past 12/18mths yet PGC share price has gone south, despite a change in management ?

Hi corlemar.

In my humble opinion, NZ investors view of a business is very short term - they are impatient. They expect everything to happen in about 2 - 3 months when the time frame should be considered in years as would be the case in say the USA.

I suggest that you have a look through this site and see what you are buying for (at todays price) 30c. What will these assets be worth in say 2 -5 - 10 years time. Will BSHL be a successful bank? What will the residual assets be worth? What is a reasonable valuation of these assets today?

I think that maybe these assets are selling at a big discount as the perception is that as a Christchurch based business the assets have been lost in the earthquake. I think only about 13% of the assets are in Canterbury (and as previouse posters have rightly noted, these loans will probably be well covered by insurance). Would not a locally owned bank have attractive prospects in NZ, especially in Canterbury during a re-building process. I have had a couple of "red medicines" so maybe I am seeing things through distorted glasses!!??

However, I have been putting my money on the line with this one.

Cheers

[Xerof]

Corlemar,

To balance the biased, wait for the downtrend to end before entering this stock. Mr P might enthuse on this aspect

These guys have talked it up since the rights issue and it really has only gone one way..... recent proclaimed purchases are down 20% on their investment in the space of a month or so, adding to already underwater investments no doubt

And having G Kerr influence shouldn't inspire any confidence either

[iceman]

Hi corlemar.

In my humble opinion, NZ investors view of a business is very short term - they are impatient. They expect everything to happen in about 2 - 3 months when the time frame should be considered in years as would be the case in say the USA.

I suggest that you have a look through this site and see what you are buying for (at todays price) 30c. What will these assets be worth in say 2 -5 - 10 years time. Will BSHL be a successful bank? What will the residual assets be worth? What is a reasonable valuation of these assets today?

I think that maybe these assets are selling at a big discount as the perception is that as a Christchurch based business the assets have been lost in the earthquake. I think only about 13% of the assets are in Canterbury (and as previouse posters have rightly noted, these loans will probably be well covered by insurance). Would not a locally owned bank have attractive prospects in NZ, especially in Canterbury during a re-building process. I have had a couple of "red medicines" so maybe I am seeing things through distorted glasses!!??

However, I have been putting my money on the line with this one.

Cheers

Scottie, very well spoken/written. Many good and well considered "arguments" have been put forward on this thread and after carefully reading all of them, I have purchased some BSH into my portfolio. I agree with your conclusion that this is a company that has been sold out of all proportions, due to the terrible Christchurch earthquake and the perception of the effects on BSH.

[Balance]

Herd them down and mop them up. Ably assisted by the receivers of HFM selling down the HFM portfolio of South Island stocks.

Excerpt : "Meanwhile PGC, after it has passed on the CBSH shares to PGC’s shareholders on a pro-rata basis, and sold its 19.9% stake in PGG Wrightson’s, and perhaps sold Perpetual Trust, will end up with a pile of cash and a hedge fund. I would see PGC then as George Kerr Inc. Kerr is a fast-moving dealmaker unlikely to want his ideas subjected to the sort of disclosure and compliance that a public listing would imply. Such impediments might suffocate. So the final step might be a takeover bid for the shell of PGC, liberating Kerr to focus on the sort of high risk, high return transactions that have made him his wealth."

[MANDRAKE]

SP dropping even further. Two relatively large off market tranactions today and yesterday. Smart money bailing out due to the PGW deal not progressing well??

[corlemar]

I'm still at a loss as to why the SP is underperforming so badly and portraying so much weakness, in comparison to NZX....even if you take the PGW situation out of play, it surely has a good fundamental business, particularly with "Heartland" on the horizon !

[ETC]

Maybe it has something to do with the potential lawsuit against Perpetual Trusts: http://www.stuff.co.nz/business/industries/4808609/Justice-for-finance-company-investors

I'm annoyed at the fact that Agria have extened their bid for PGW, we now have to wait until the 23rd to get our BSH shares and find out what PGC are going to do with the cash from the sale.

[Newman]

I'm still at a loss as to why the SP is underperforming so badly and portraying so much weakness, in comparison to NZX....even if you take the PGW situation out of play, it surely has a good fundamental business, particularly with "Heartland" on the horizon !

Largely because PGC is not able to give the market an update about the effect of earthquakes on its business after more than 5 weeks of the earthquakes. This is an indication that its CEO and senior managers are propably not as capable as many expected. I would not be surprised if the share price keeps going down because market hates uncertainty.

[corlemar]

Largely because PGC is not able to give the market an update about the effect of earthquakes on its business after more than 5 weeks of the earthquakes. This is an indication that its CEO and senior managers are propably not as capable as many expected. I would not be surprised if the share price keeps going down because market hates uncertainty.

Didn't they announce to market that business unaffected sometime shortly after earthquake....

[corlemar]

Does anyone know what the timeframe is for when shareholders will receive their shares in BSH ? Also, does anyone know what the likely breakdown will be, given current sp of PGC ?

[Balance]

Does anyone know what the timeframe is for when shareholders will receive their shares in BSH ? Also, does anyone know what the likely breakdown will be, given current sp of PGC ?

Distribution of BSHL has nothing to do with sp of PGC.

I work out ratio at round about 1 BSHL share to 3.8 PGC shares.

[corlemar]

thanks balance.....i assume therefore that apportionment will represent circa 70% thereafter reducing pgc say at todays sp to around $0.08c (30%) per share.

[corlemar]

REL: 0912 HRS Pyne Gould Corporation Limited

GENERAL: PGC: Opening Financial Statements

Building Society Holdings Limited and Combined Building Society's
opening financial statements

11 April 2011

Building Society Holdings Limited (BSH) as at 7 January 2011 and Combined
Building Society's opening financial statements as at 5 January 2011 have
been released today, which confirms opening Net Tangible Assets (NTA) of 88c
per share. Further detail is provided in the attached presentation.

BSH's financial year end is 30 June 2011; annual results are expected to be
released in August 2011.

If other financial inst are anything to go by - BSH should be trading way beyond NTA - 2-3 times at least. (caveat: But thats just one measure of many.)

I imagine at present the stock is quite illiquid and probably will continue to be so, until the PGC/PGW situation is resolved.....this may perhaps explain why the price is quite depressed

[percy]

Todays announcement together with timetable should see a bit more interest in PGC.What is positive is that BSH should be included in NZX 50 Index.
belgarion's comment about BSH trading at 2 to 3 times the NTA would appear to be right on the money.Just not sure how long it will take to get there.But for those of us who have patience, the wait should be supplemented by nice dividends.

[Xerof]

Down 20 odd % since listing, and thats before the next and largest tranche of shares ex PGC hits the punters - what makes you think they will do anything but sell as well?

Finance coys are showered in ****e........PGC down over 30% on its own account - GK must be having kittens - or margin calls......

[percy]

Down 20 odd % since listing, and thats before the next and largest tranche of shares ex PGC hits the punters - what makes you think they will do anything but sell as well?

Finance coys are showered in ****e........PGC down over 30% on its own account - GK must be having kittens - or margin calls......

They may well sell .
The prospects for BSH are excellent.They are well funded,know what part of the market they want,and with Greenslade in charge should be able to achieve their objectives. I feel they will be well supported,and will do well where Aussie banks do not want to go.they have already achieved a lot bringing the merged three companies together.There will always be room for a finance company.Small growing companies need finance,as do people with ideas.

[corlemar]

They may well sell .
The prospects for BSH are excellent.They are well funded,know what part of the market they want,and with Greenslade in charge should be able to achieve their objectives. I feel they will be well supported,and will do well where Aussie banks do not want to go.they have already achieved a lot bringing the merged three companies together.There will always be room for a finance company.Small growing companies need finance,as do people with ideas.

I agree with Percy....BSH appears on the face of it, to be a clean company with no impairments like those that were seen a cple of years ago. It's targeting an area not seen or tapped by others, so I can only see the company significantly grow in value. It may take a cple of years, but the growth accompanied with good dividends will make this stock good value

[geezy]

PGC
13/04/2011 17:08
GENERAL

REL: 1708 HRS Pyne Gould Corporation Limited

GENERAL: PGC: PGC Announces Details of BSHL Share Distribution

NZX Release
PGC Announces Details of BSHL Share Distribution
13 April 2011

Pyne Gould Corporation Limited (PGC) today announced provisional details of a
planned in specie distribution of its 72.21% shareholding in Building Society
Holdings Limited (BSH) - a
move that is expected to pave the way for BSH entering into the NZX50 index.

Initial Court Orders have now been obtained in respect of the proposed pro
rata distribution, via a scheme of arrangement, of BSH shares to PGC
shareholders.

Documentation is now being finalised, and is expected to be distributed
following the closing
of the partial takeover offer made by Agria (Singapore) Pte Ltd for PGG
Wrightson. Agria's
offer is set to close on the 23rd of April.
Based on there being 216,630,283 BSH shares to be distributed amongst PGC
shareholders
(and there being 808,319,571 PGC shares) the d
istribution, if implemented,
will mean that:

- Each PGC shareholder will receive approximately 268 BSH shares for every
1000 PGC
shares held at the "Record Date".

- In consideration for that distribution, approximately 73.2% of the PGC
shares held by each PGC shareholder at the "Record Date" will be cancelled.
This means that of the total 808,319,571 PGC shares, approximately
591,567,312 will be cancelled. As the
cancellation applies to all PGC shareholders in the same way, it will have no
effect on each shareholder's proportionate interest in PGC (subject to
rounding).

The proportion of PGC shares to be cancelled was set so that the market value
of PGC shares
to be cancelled approximated the market value of the BSH shares to be
distributed (based
on the quoted market prices for PGC shares ($0.26 per share) and BSH shares
($0.71 per share) at the "Determination Time", being 5:00pm on 8 April 2011).

Following this distribution and cancellation, a PGC shareholder will hold
approxima
tely 268
BSH shares and 268 PGC shares for every 1000 PGC shares previously held.
The currently anticipated timetable is:
- Agria offer closes - 23 April
- Shareholder materials mailed out - 2 May 2011
- PGC shareholder meeting - 18 May 2011
- Record Date for determining entitlements under the Distribution - 27 May
2011.
- Distribution of BSH shares and cancellation of PGC shares - 30 May 2011
These dates are indicative only, and may change.
Distribution is an important step in giving effect to PGC's strategy to
return value to its
shareholders. It will benefit PGC shareholders by:
- resulting in the expected inclusion of BSH in the NZX50 index, as a result
of BSH shares being held by a broader range of investors than would otherwise
be the case had PGC remained as a dominant shareholder (PGC's shareholding is
currently disregarded by NZX for indexation purposes) although it is likely
that PGC will in time be removed from the NZX50 following the distribution
because it will not meet
the
free float capitalisation threshold for inclusion in the NZX50 index;
- encouraging broader institutional investor interest in BSH shares, and
therefore
improving institutional representation on the BSH share register, as a result
of
gaining entry into the NZX50 index; and
- increasing the frequency and volume of trading in BSH shares, due to BSH
having a
more diverse shareholder base, which should promote price discovery and help
reduce pricing anomalies which can occur in less liquid stocks.

Background
The merger of the financial services businesses of MARAC Finance Limited,
Southern Cross
Building Society and Canterbury Building Society was successfully completed
on 7 January 2011 and BSH (the parent of the new Heartland financial services
group) was listed on the
NZSX on 1 February 2011.

Following completion of the Merger, the PGC Group holds a 72.21% stake in
BSH.
Earlier this week BSH released its opening financial position as at 7 January
2011 confirming
the company had n
et tangible assets of 88c per share.
- Ends -

For further information contact:

Michael Jonas
General Counsel
Pyne Gould Corporation
DDI 09 927 9111
Mobile 029 770 0181
End CA:00208003 For:PGC Type:GENERAL Time:2011-04-13 17:08:50

didnt see anyone post this so i might as well :)

[Lizard]

Posted below on the BSH thread, but really belongs here...

NTA per "new" PGC share would be about 95cps, with 38cps of PGW shares/cash. But currently, at 31cps for PGC shares and 70cps for BSH, the market is valuing the reconstructed PGC at about 45.6cps - i.e. =(31-70*.268)/.268.

On revenues/profits from continuing ops and cash from PGW (assuming able to be sold in full at Agria equivalent price), I think worth around 60cps, but lots of uncertainty around that figure - fee revenue has fallen dramatically in first half and hard to get a feel for ongoing returns from the likes of Torchlight and the property management arm. Reads to me like the property management side might have a few risky bits to it.

One thing that I did not get is why the distribution of BSH shares was waiting on the Agria bid going unconditional? Also, given that they are intending to distribute all the BSH shares, why do they then mention the possibility of using excess cash from sale of PGW shares to provide equity assistance to BSHL? If they want to separate out, why get back in? Is it just easier to inject new equity if they are not a majority holder or does it mean they are free to negotiate a better price for providing assistance without impairing the value of their existing holding?

[Lizard]

I suppose one possibility in answer to my last paragraph is that it might put PGC in a position where they could partially underwrite a BSH rights issue once the shares are distributed.

[percy]

Posted below on the BSH thread, but really belongs here...

NTA per "new" PGC share would be about 95cps, with 38cps of PGW shares/cash. But currently, at 31cps for PGC shares and 70cps for BSH, the market is valuing the reconstructed PGC at about 45.6cps - i.e. =(31-70*.268)/.268.

On revenues/profits from continuing ops and cash from PGW (assuming able to be sold in full at Agria equivalent price), I think worth around 60cps, but lots of uncertainty around that figure - fee revenue has fallen dramatically in first half and hard to get a feel for ongoing returns from the likes of Torchlight and the property management arm. Reads to me like the property management side might have a few risky bits to it.

One thing that I did not get is why the distribution of BSH shares was waiting on the Agria bid going unconditional? Also, given that they are intending to distribute all the BSH shares, why do they then mention the possibility of using excess cash from sale of PGW shares to provide equity assistance to BSHL? If they want to separate out, why get back in? Is it just easier to inject new equity if they are not a majority holder or does it mean they are free to negotiate a better price for providing assistance without impairing the value of their existing holding?

Thanks for your reply Lizard.I thought everyone had lost interest in the NTA of 'new' PGC so I thought I would provoke some.
I think Bruce Irving stated some-where they were waiting for the Agria bid to go unconditional so they could work out how PGC would repay MARAC loan.{Note I thought Marac owed PGC,so was wrong again}.As for providing equity assistance to BSH.? I have no idea unless there is a tie up with Agria over PGW finance being sold to BSH with PGC getting some parts.{This has been denied].Makes no sense to me.

[Lizard]

Yes, I just got from the interim report:



fund repayment of the Promissory Note owing to MARAC;
provide working capital and expenses for the ongoing PGC businesses;
the balance will be distributed to PGC shareholders or used to provide equity assistance to BSHL, if required.


Though I think repayment of the loan uses up a good chunk of the funds if they get scaled right back on the Agria offer, so wouldn't be much to go on BSHL anyway.

[ETC]

I think PGC owes MARAC around 27 million.

In one of their updates PGC ellude to the fact they may provide capital to BSH for more shares, I'm guessing this'd happen to allow BSH to make some sort of acquisiton... cough* cough* PGW finance. This might be good for PGC shareholders but will have a negative effect for SCBS and CBS shareholders who own the other 28% of BSH.

[Lizard]

I think BSH is more likely to want extra equity in order to fund lending while their depositor base contracts.

[percy]

I think BSH is more likely to want extra equity in order to fund lending while their depositor base contracts.

This is the $64,000 question.At the last meeting they spoke of the high renewals of the building societies,and the fact they had too much cash and too much liquidity.
Some people will say they will lose "loyal" depositers once GG is lifted,others say the banking licence will mean they will retain "loyal"depositors and will attract new "loyal" depositors.I can only hope it is the latter.

[Lizard]

Hi percy,

Yes, maybe I am being too pessimistic. Should point out that CBS renewal rates were up at 80% for January, although average term still only 7 months at that point, so not really indicative of ex-guarantee period in itself. However, 30% of deposits were non-guaranteed, which is probably more significant, as are less likely to be affected by expiry of the guarantee in their decision-making.

[percy]

Hi percy,

Yes, maybe I am being too pessimistic. Should point out that CBS renewal rates were up at 80% for January, although average term still only 7 months at that point, so not really indicative of ex-guarantee period in itself. However, 30% of deposits were non-guaranteed, which is probably more significant, as are less likely to be affected by expiry of the guarantee in their decision-making.
You maybe too pessimistic,I may be too optimistic.I remember one time saying to Selena I thought unemployment was getting high at 5%.He said I had it the wrong way round.It was very positive we had 95% full employment!!!!

[winner69]

You guys are all over the place with your thinking as to what PGC is worth

Prob George is the only one who has a clue as he is waits in the shadows getting ready to make his move and possibly rape and pillage you in the process

However why not do a simple bottom up valuation and see what the sum of the parts are ... in $ terms and then you can assess what the shareprice could be

If you guys want to give me the numbers I'll do it for you but percy might have more time on his hands and could become the 'owner' of the valuation .... how about it percy

So list what PGC has and see what each part is worth - some like PGW shares are straight forward but no doubt you all have a view on what the other parts are worth .... but collective wisdom can be quite powerful

So whose going to start the ball rolling - a list to start with and no doubt missed something off

Interest in PGW is $X (some will convert to cash soon)
Perpetual is worth $y
Wealth Management is worth $Z
Cash $Z
Other factors like whether they owe Marac or not ?


Let's add it up and see eh
PGW

[ETC]

Well i guess i'll do the easy part and figure out what the value of PGW is worth.

PGC owns 18.3% of PGW or 138 711 372 shares, they are selling 38.3% of these shares to Agria @ 60c, 53 126 455 shares x 60c = $31 875 873 (cash)

This leaves PGC holding 85 584 917 shares in PGW, with an average annual price of say 53c, 85 584 917 x 53c = $45 360 006

Add these figures together and you get $77 235 879, divided this into the reduced number of PGC shares 215 821 325 and you get 35c a share.

[percy]

You guys are all over the place with your thinking as to what PGC is worth

Prob George is the only one who has a clue as he is waits in the shadows getting ready to make his move and possibly rape and pillage you in the process

However why not do a simple bottom up valuation and see what the sum of the parts are ... in $ terms and then you can assess what the shareprice could be

If you guys want to give me the numbers I'll do it for you but percy might have more time on his hands and could become the 'owner' of the valuation .... how about it percy

So list what PGC has and see what each part is worth - some like PGW shares are straight forward but no doubt you all have a view on what the other parts are worth .... but collective wisdom can be quite powerful

So whose going to start the ball rolling - a list to start with and no doubt missed something off

Interest in PGW is $X (some will convert to cash soon)
Perpetual is worth $y
Wealth Management is worth $Z
Cash $Z
Other factors like whether they owe Marac or not ?


Let's add it up and see eh
PGW

What a great post winner69.
Yes, I expect George Ker knows the exact values of each part of PGC.As I have been raped and pillage once to often on the market I thought it was only right to have some ideas of value.To me it looked as though other posters could only see NTA of BSH.I knew less than half of PGC 's assets went into BSH so there was a lot of value still in PGC.Lizard's NTA of 95cents post no.626 on this thread and SCOTTY's NTA of 93.73 post no.64 on BSH thread confirm there is a lot of value there.I am not competent enough to give meaningful valuations to the parts of PGC.The hardest to value must be the wealth management,yet this is where Ker made his money.I am happy enough to know there is value there.

[winner69]

Thanks ETC for telling me what the PGW shares are worth to PGC

Why I think you guys are all the place with your thinking and why we should try to do a bottom up sum of the parts valuation is explained below. Firstly forget all about BSH distibutions and share cancellations and all that - just concentrate on today

Even that is difficult because PGC is one of those companies who like to keep shareholders in the dark - one bad point and some take 10% or more any valuation just for that reason - but I digress

Anyway the value of PGW and BSH interests we can calculate - as at today they are worth $76.0m and $153,8m respectively (the PGW does depend on how much scaling eventuates). We know they are going to repay that P Note of $27.0m so take that off. Hidden away on the balance sheet are some other liabilities estimated at about $5.0m. I see they show a tax asset but i tend to ignore these when doing valuations. Also hard to see what cash they may be holding but assume there is float somewhere and lets use $2,0m

So the parts we know about are worth a nice round $200m today

The market cap (what the collective wisdom of all the punters in the land except George think PGC is worth )today of PGC is $234m

So is Perpetual, Torchlight, some other bits and pieces and the impaired investments inherited from Marac only worth $34m in total?

Whose going to start the ball rolling with valuations of these bits and pieces to complete the jigsaw

For one the impaired assets from marac are in the books at $60m odd - surely they can't be all bad? but Hanover, SCF stuff were pretty bad - what you guys think they are worth in todays money

Perpetual according to one preso i saw made about $5m operating profit so must be worth something. Jeez after all the Trust part actually exists and they have $500m under management or I like the term advice. Then again the punters might be thinking that Perpetual Trust are going to be sued heaps re some of finance company collapses but one think they have some insurance for this

Didn't they sink $15m into Torchlight to get it up and running - surely not lost the lot even though I gather George has put some extra money in - what value do we put on that.

In the notes to the interim accounts there are bits like topping up any shortfall in something (I didn't read too throughly) and in one of the announcemets there was something about topping up BSH by using spare cash and giving you guys the shares they get (didn't really understand this)

we are getting there - so lets put some numbers around these parts - the average of our expert opinions will make a pretty good guess

maybe George is getting ready to rape and pillage shareholders .... but then again maybe George knows best

So appears one should take the free money on offer - if it doesn't turn out that way we can always look back to see what went wrong

So what do we put down as what the parts are worth?

[percy]

Thanks again winner69.
PGC put $15mil into Torchlight as seed capital/shareholding.Torchlight raised I think over $160mil ,which Ker lent to SCF at a very high interest rate.They were the first to be paid out,so they got the money back with interest.No word as to what they/Kerr have/has done with this money.Torchlight would have charged SCF loan establishment fees etc.So I would think the Torchlight holding has to be a lot more than the $15 mil PGC put into it.Say Ker earnt 2% fees?On $145 mil that would be near $3mil a year.That would value Torchlight at say $12mil.add the $15mil seed capital then Torchlight holding should be worth $27mil not $15mil.Torchlight fund may well have grown from the $160mil.What surprised me most was how quickly ker raised this amount of money.Not 10mil,not 25mil,but over $160mil.!!!!! Not a lot of people have thought about that.!!!

[ETC]

Perpetual seems to be growing…

“In the six month period ended 31 December 2010 Perpetual also acquired $105 million of funds under advice and established nine new funds. Perpetual now has $587 million in either funds under advice or management.”

If they have a 1% to 2% management fee then their income should be around 5 to 10 million a year. So far this year they are reporting an after tax loss of $0.4 million, but they put this down to costs associated to “growing the business”.

Torchlight and EPIC seems to be managed by Perpetual and have contributed $2.9 million so far in annuity and fees. I wonder how much of Perpetual’s “acquired $105 million” is related to these two funds and if the $2.9 million is counted as part of Perpetual’s earnings?

I’m unsure what’s happening with RECL, it looks like PGC have set up some sort of contract with MARAC where they manage the bad loans for a fee but take on the responsibility of losses. Am I right? This doesn’t seem like a great deal for PGC, especially if all the loans go south and PGC ends up owing MARAC… anyway the contract to manage the property looks to be worth 11 million over 5 years so it’s worth $2.2 million annually.

I put the revenue of PGC (- minus MARAC) at 7 million to 12 million a year. I’ve left out the earnings from Torchlight/ EPIC as I’m unsure how they relate to the Perpetual Group.

Note this is definitely back-of-the-napkin math, I’d appreciate any input.

[winner69]

Looking back over the posts and making some assumptions about what posters are really saying I feel the consensus worth of the parts are something like this -

PGW interest $76m
BSH interest $154m
P Note ($27m)
Other stuff ($3m)
Sub total $200m

Perpetual / Wealth Mgt bits $40m - Perpetual earnings of $3m plus bits like EPAM
Torchlight $25m -percy says worth more than the $15m they put in
Real Estate Assets $25m - discount the $50m of assets by 50%
Ongoing business $90m

TOTAL $290m

Against market cap of $234 PGC a bargain on this basis

But looking forward even more of a bargain if you believe the $90m worth of the ongoing businesses comapred to the residual market cap of $34m after allowing for the parts we know are valued correctly (aand not wanted by PGC)

One could say $90m for $34m - good stuff eh

[Lizard]

Hi ETC,

Yes, the related party stuff does my head in a bit trying to tease it apart and segmented info is not as clear-cut as some.

Some comments...
Trustee services - seems to tick along fairly steadily with about $15-$16m of income, generating about $3m per year in profit. Unknown risk of legal action, but would expect some insurance cover as Winner has suggested. Possibly dented by sad & sudden loss of staff. I'd say worth $15m.

Funds Management - Growing FUMA, but $587m is tiny and not really break-even level for funds management, so a bit early to place much value on, but perhaps give it $10m for now.

Van Eyk - part of funds management, but an associate, not subsidiary, so only the value of the equity interest. Mostly provides subscription research service to investment advisors (maybe some similarities to NZ's IRG?). Have spent about $6m on it, although $1.6m sitting in liabilities still, so current value $4.4m.

EPAM - I'd rate at about $7m based on owning 11% of EPIC which had about $72m in equity at last September and has had to stump up with more funds ($12m borrowed from Torchlight) to support their investment in UK Moto. They are planning to sell down some of their UK investments and perhaps invest in NZ instead should the govt have any small assets they want to dispose of or P-P-P's on offer. Probably could even discount that $7m further in the circumstances, although that is still a big cropping of their initial investment in EPAM (which one broker estimates at $22.5m)

Torchlight - There's $15m in there of seed capital to count and it's probably still there and not much changed yet. The fee revenue counts under funds management and/or trustee services.

RECL - probably the most difficult. Best summary found so far is in the interim results presentation, where net assets are given at $61.8m. This is based on a direct ownership interest in 175 individual properties valued at $63.1m, property finance receivables of $9.4m and external loans of $10.7m. Impairments from here are probably mostly limited to the few remaining finance receivables, so perhaps another $5m of impairments to come? Leaves value of the ex-Marac portfolio at $56.8m. However, on top of the distressed "bad bank" assets, they now also have responsibility under the management agreement to manage Marac ($142m?) of property finance receivables. For this, they receive $11m up front, but (as I understand it) Marac can claim back losses of up to $33m. If anything, I would rate this deal as a negative transaction overall for PGC, but, for starters, give it a zero.

So that totals $108.2m. Leave it to Winner to add back the BSH, PGW shares, deduct MFSL loan, figure out whether to allow anything for tax assets, corporate cash and capitalised costs and divide by shares on issue...

[Lizard]

Oops, sorry Winner. Just saw you posted while I was slowly grinding out that post, so I may have missed the boat for your analysis...

[percy]

thanks winner69 and Lizard.
The sum of parts = $290mil.Where has $110mil gone?
Used to be a NTA of approx 50cents a share.ie with just over 800 mil shares $400mil of assets. Now only $290mil.One big difference.! ????

[Lizard]

To be honest, I have a suspicion that Winner is having us on a little - unless he's suddenly changed his colours from being Mr ROIC to the NAV Man... I'm sure he'd be the first to preach against relying on the value of illiquid assets held in a Pandora's Box to which you do not possess the key (though I think the Pandora's Box bit was one of PT's gems).

[winner69]

The level of acceptances for PGW mean PGC's percentage will get scaled back quite a bit so the numbers needs reworking ... again.

Assummed full acceptance of the Agria offer so as per ETC workings 38% at 60 cents and rest at market - off course the value will change day by day but that is the situation this week

Still going to have afair chunk left - will they just return them to PGC shareholders as they said they might ... or maybe they already have a buyer lined up - belg or the maoris?

[winner69]

Oops, sorry Winner. Just saw you posted while I was slowly grinding out that post, so I may have missed the boat for your analysis...

No it was good you posted what you thought without having an inkling of what i thought

Well well .... I said whats left after PGW and BSH goes is $90m and you say $109m ... different thinking but abouit the same result

As always when 2 great minds can quite disagree (but close) the real answer is generally in between ... so lets split the difference and say the ongoing PGC business is worth $100m (a nice round number)

A couple of brokers reports around suggest $120-$140m so factoring in their eternal optimism I think we have it about right - lets give ourselves a pat on the back

Percy won't like it though - wonder where the best part of $100m went?

As always

[winner69]

.....illiquid assets held in a Pandora's Box to which you do not possess the key (though I think the Pandora's Box bit was one of PT's gems).


Talking of Pandora .... and your other love jewellery ... the Pandora thing is an amazing marketing story - once the girls get some beads or worse still a charm they are hooked ..... can even buy them at Wellington airport at Silvermoon I think it is

What a brand

Liz - you hooked?

[percy]

No it was good you posted what you thought without having an inkling of what i thought

Well well .... I said whats left after PGW and BSH goes is $90m and you say $109m ... different thinking but abouit the same result

As always when 2 great minds can quite disagree (but close) the real answer is generally in between ... so lets split the difference and say the ongoing PGC business is worth $100m (a nice round number)

A couple of brokers reports around suggest $120-$140m so factoring in their eternal optimism I think we have it about right - lets give ourselves a pat on the back

Percy won't like it though - wonder where the best part of $100m went?

As always

Until soneone comes up with the answer it is still in PGC. PGC has had a recent recap,and with Marac looking for a banking licence we must take the previous NTA as honest.Banks ,finance companies the NTA is much more important then other type of companies.We look at banks trading at say 3 times NTA ,so when we see PGC/BSH trading at a discount ,we know either the market is wrong or we are. Over $100mil missing in company's looking for a banking licence? Yeah Right!!!

[Lizard]

Hi Percy,

So where it went - about $50m lost between equity transferred to CBS and that reflected in the value of their BSH holding. About $7m off PGW for lower sp. Another $5-$10m off the value of the property investments and receivables. Another $10m knocked off for what we are valuing EPAM at. Just about there... maybe some in intangibles, although I think what we allowed for perpetual would have covered that. Ignoring the tax assets of $20m.

[percy]

Not so.NTA of BSH 88cents.PGC ownes 72% so 300mil BSH shares x88cents x.72 =$190.08 mil.We were told assets going into BSH was less than half PGC's NTA so therefore still over $200mil in PGC.
I would accept $10mil lost,well maybe I wouldn't, but $50mil makes no sense to me. I think the CBS transaction was at near to their NTA so would have expected all parties did the deal at near NTA.

[winner69]

Not so.NTA of BSH 88cents.PGC ownes 72% so 300mil BSH shares x88cents x.72 =$190.08 mil.We were told assets going into BSH was less than half PGC's NTA so therefore still over $200mil in PGC.
I would accept $10mil lost,well maybe I wouldn't, but $50mil makes no sense to me. I think the CBS transaction was at near to their NTA so would have expected all parties did the deal at near NTA.

We are not trying to calculate a NTA for PGC percy ... rather the market value of PGC as it stands this week .... so we can see whether the shares are actually cheap or not

In that respect the market is valuing the BSH part at 71 cents a share ... if you got the BSH shares today from PGC they are still only 71 cents .... not the touted 88 cents

Makes sense?

[percy]

We are not trying to calculate a NTA for PGC percy ... rather the market value of PGC as it stands this week .... so we can see whether the shares are actually cheap or not

In that respect the market is valuing the BSH part at 71 cents a share ... if you got the BSH shares today from PGC they are still only 71 cents .... not the touted 88 cents

Makes sense?
Ofcourse you make sense,however I still feel the NTA of a finnacial stock is of great importance,and in the case of PGC/BSH if you understand that less than half the assets went into BSH it gives me a meaningful understanding of what assets are left in PGC.There is a huge difference on the return PGC can earn on $200 mil of assets rather than $100mil,in fact it is most probably double.

[SCOTTY]

Hi Guys

I'm with Percy on this one. NTA is very very very important. Without nta there is no assets and therefore no business. The shareprice of BSH does not particularly interest me at this stage as the market has yet to see business performance from the new entity on which to base future valuations. The nta of 88c is for now very reassuring for future growth and future valuations. As we know, traditionally financial institutions trade at a premium to nta.

[winner69]

Liz

You ever seen this - ASX report showing LIC discounts to NTA

http://www.asx.net.au/products/market-update-managed-funds.htm

[ETC]

Percy I don’t see either PGC or BSH trading above their NTA in the near future.

To me PGC looks like the leftover scraps of a finance company, I’m dubious about the amount of residual value left and think they’ll have issues with cash flow now that MARAC has gone.

BSH is only a good idea at the moment. It’ll take time to see if management can achieve their stated goal of becoming a bank and grow their lending and borrowing.

The reason I bought into PGC was because of their intentions to become a bank and it also gave me a bit of exposure to rural growth through PGW. Let just say I’m a bit disappointed with this investment but am hanging in there as I’m hoping BSH will be the light at the end of the tunnel.

[percy]

Percy I don’t see either PGC or BSH trading above their NTA in the near future.

To me PGC looks like the leftover scraps of a finance company, I’m dubious about the amount of residual value left and think they’ll have issues with cash flow now that MARAC has gone.

BSH is only a good idea at the moment. It’ll take time to see if management can achieve their stated goal of becoming a bank and grow their lending and borrowing.

The reason I bought into PGC was because of their intentions to become a bank and it also gave me a bit of exposure to rural growth through PGW. Let just say I’m a bit disappointed with this investment but am hanging in there as I’m hoping BSH will be the light at the end of the tunnel.

I agree with you,but I usually find buying a sun umbrella in winter turns out to be a good investment.PGC/BSH will take a little longer than this summer,but I am sure in 2 or 3 summers time we will all be asking ourselves why we did not buy more.The bank will at some time trade at 3 or more times NTA.PGC should Ker run it will be interesting.In an earlier post I mentioned how quickly Ker raised huge money for Torchlight,and most have forgotten it was Ker's backing that led to the huge amount on money being raised for the recap of PGC. Ker is a deal maker,who made his fortune out of funds management businesses.I am sorry the light at the end of the tunnel is in fact a train coming towards us.!!!

[percy]

ETC,
I have been in the garden clearing my thoughts.The bits left in PGC offer someone of George Ker's background great opportunities for great growth without the need of extra capital.The property part fits with his property dealing experience .Property money from sold properties could be reinvested,or returned to shareholders.
Perpetual will continue on without the call for more funds.The speed in which Torchlight raised what $160mil and got it working straight away means he gets on with things.OK at present we are unsure of what is going on,but a few deals,a bit of news,and the share price could be a lot of fun.I can not see Ker sitting still.I bet he is flat out doing deals and making money..BSH will be slow and sure,but the real fun and share price growth could be with PGC.By holding both you have a foot in each camp.The reason I have posted on PGC so much is that I am sure we have all forgotten that Marac did not make all of PGC's money,and not all of PGC's assets were just in MARAC or PGW.The bank talk means we have taken our eye of PGC.The bank is up and running ,and so is Ker.

[winner69]

I am sure we have all forgotten that Marac did not make all of PGC's money,and not all of PGC's assets were just in MARAC or PGW.

Looking at the 06/07/08 reports (like before the **** hit the fan and the zillions of shareholder money went down the gurgler) nearly ALL of PGC net profit came from Marac and PGW - Perpetual and other businesses profit over those years was a loss of $2.5m, a profit of $1.5m and a profit of $1.1m respectively

Hardly inspiring stuff ..... hopefully things have changed

[ETC]

Percy i hope that PGC does become George Kerr incorporated and isn't shuffled off to the side to be forgotten about. Don't count on the property loans as an extra source of income though. PGC are just managing the property and any cash realised from their sale will go back to MARAC and BSH.

I'm not sure what George Kerr can do with the Perpetual and the residual assets from PGW but here's hoping he has some financial trick up his sleeve.

[winner69]

http://www.perpetual.co.nz/uploadGallery/EPIC/New%20EPIC%20Strategic%20Review_%C6%92.pdf

This is an interesting read

Was it George or was it Torchlight that is owned by PGC that pumped in the $12m bridging finance .... seems a bit unclear to me

[Lizard]

Hi Percy,

I'd think there is a good basis in your NTA argument. BSH doesn't yet trade at NTA, but is likely to close the gap at FY11 result and start to exceed it post HY12. The only question is where NTA will be by then. No matter how much they've purged the books, the NTA on finance coys has not yet reversed its steady shrinkage.

Most of the PGW part is not a finance coy - simply a listed investment over which PGC have little control and for which you cannot control the value at which PGC will sell the shares. Other than the shares that can be presumed to be sold into the Agria bid, the remaining value should really be discounted to you due it being beyond your control.

PGC is also not a finance coy. A large chunk of the assets is in property which needs to be valued at a discount to NAV, if only because most property trusts are. Not to mention the possibility of impairments etc, given that the previous owners didn't manage a return on investment sufficient to pay the interest bills. The other half of PGC is a rather miscellaneous collection of unproven assets. With scale, they should exceed NTA, but without scale, the NTA is eroded by corporate costs. George Kerr may be all you say, but we have seen plenty of management heroes who later failed shareholder expectations. And while all the PGC strands in themselves might prove profitable, they still carry some significant corporate costs that may now be rather excessive to the size of remaining businesses. NTA will be important, but it might be the NTA of 12 months time that justifies the price - caution prevails.

[Lizard]

http://www.perpetual.co.nz/uploadGallery/EPIC/New%20EPIC%20Strategic%20Review_%C6%92.pdf

This is an interesting read

Was it George or was it Torchlight that is owned by PGC that pumped in the $12m bridging finance .... seems a bit unclear to me

"Torchlight Fund no.1 LP"

Does LP stand for Limited Partnership - and if so, with whom? When I first read it, I just assumed it was the same entity as Torchlight GP 1 Ltd which is 100% owned by Torchlight Investment Group, which is 100% Perpetual etc, etc.

[percy]

Percy i hope that PGC does become George Kerr incorporated and isn't shuffled off to the side to be forgotten about. Don't count on the property loans as an extra source of income though. PGC are just managing the property and any cash realised from their sale will go back to MARAC and BSH.

I'm not sure what George Kerr can do with the Perpetual and the residual assets from PGW but here's hoping he has some financial trick up his sleeve.

PGC owns RECL who owns the impaired property.Like you I hope he has a NUMBER of tricks up his sleeve.

[percy]

Hi Percy,

I'd think there is a good basis in your NTA argument. BSH doesn't yet trade at NTA, but is likely to close the gap at FY11 result and start to exceed it post HY12. The only question is where NTA will be by then. No matter how much they've purged the books, the NTA on finance coys has not yet reversed its steady shrinkage.

Most of the PGW part is not a finance coy - simply a listed investment over which PGC have little control and for which you cannot control the value at which PGC will sell the shares. Other than the shares that can be presumed to be sold into the Agria bid, the remaining value should really be discounted to you due it being beyond your control.

PGC is also not a finance coy. A large chunk of the assets is in property which needs to be valued at a discount to NAV, if only because most property trusts are. Not to mention the possibility of impairments etc, given that the previous owners didn't manage a return on investment sufficient to pay the interest bills. The other half of PGC is a rather miscellaneous collection of unproven assets. With scale, they should exceed NTA, but without scale, the NTA is eroded by corporate costs. George Kerr may be all you say, but we have seen plenty of management heroes who later failed shareholder expectations. And while all the PGC strands in themselves might prove profitable, they still carry some significant corporate costs that may now be rather excessive to the size of remaining businesses. NTA will be important, but it might be the NTA of 12 months time that justifies the price - caution prevails.
Thanks Lizard,as always sage advice.George Kerr is the key.Whether he can walk on water or has trouble passing water time will tell.He has a history of making money,so no reason he should stop doing so now,but whether he wants a listed company as his vehicle or not has to be seen.The NAV of the impaired property is a concern.Every meeting I have been to, we have been told there will be no further write downs,only for further write downs to be made.So would be silly of me to comment.Corporate costs should not be a major concern as Kerr has always run a lean operation.He does not need hanger ons or consultants,he is the deal maker.
caution prevails. Certainly does.

[percy]

http://www.perpetual.co.nz/uploadGallery/EPIC/New%20EPIC%20Strategic%20Review_%C6%92.pdf

This is an interesting read

Was it George or was it Torchlight that is owned by PGC that pumped in the $12m bridging finance .... seems a bit unclear to me

Thanks for the link.I take it as Torchlight.Loved the statement "Torchlight Fund No.1 LP provided $12mil as a bridge facility via the issuance by EPIC of a subordinated convertible note",
No free lunch with George.The customer always pays,and pays,then pays a bit more.Love it.!!!1

[winner69]

Thanks for the link.I take it as Torchlight.Loved the statement "Torchlight Fund No.1 LP provided $12mil as a bridge facility via the issuance by EPIC of a subordinated convertible note",
No free lunch with George.The customer always pays,and pays,then pays a bit more.Love it.!!!1

Thats why I think their is Torchlight and another Torchlight that is Georges ... maybe completely wrong but things are not all that clear when you look at the inititials and the letters after the word Torchlight

[percy]

Thats why I think their is Torchlight and another Torchlight that is Georges ... maybe completely wrong but things are not all that clear when you look at the inititials and the letters after the word Torchlight
I would think there are a number of Torchlight Funds,No1 to No.100,just hope they all pay management fees to PGC.

[ETC]

PGC owns RECL who owns the impaired property.Like you I hope he has a NUMBER of tricks up his sleeve.

Huh, thanks for that percy. I just assumed that PGC were managing the loans. Is that what the 27 million P Note is for payment for the property in RECL?

[winner69]

I would think there are a number of Torchlight Funds,No1 to No.100,just hope they all pay management fees to PGC.

So its all one big money go round then ... moving money from one shoebox to another shoebox that has got a bit empty and charge a fee for doing it as well .... sounds kosher .... haven't we recently heard all this before.

There was a story about this in the NBR a few weeks ago that suggested that George was the one who lent the money to EPIC and the writer than pointed out that George has almost put back the $18m he got paid for it back into it ..... so god only knows what is going on

[Lizard]

According to the register of Limited Partnerships at the companies office, Torchlight Fund No.1 GP is the General Partner in the limited partnership. Though the Limited Partners (as always) are not disclosed and could be one or several. Possibly just a tax-efficient structure for George's high wealth investors.

[percy]

Huh, thanks for that percy. I just assumed that PGC were managing the loans. Is that what the 27 million P Note is for payment for the property in RECL?

I am sorry but I do not know what the P note is all about.I have posted before that I was surprised as I thought Marac owed PGC,but it was the other way round.

[percy]

So its all one big money go round then ... moving money from one shoebox to another shoebox that has got a bit empty and charge a fee for doing it as well .... sounds kosher .... haven't we recently heard all this before.

There was a story about this in the NBR a few weeks ago that suggested that George was the one who lent the money to EPIC and the writer than pointed out that George has almost put back the $18m he got paid for it back into it ..... so god only knows what is going on
Good fun.good story,just hope it is not right.!!!or if it is PGC are getting fees from him. These type of stories are what I think will make him not wanting a listed vehicle.Cannot see him wanting to answer your questions,Lizard's Scotty's ,mine and NBR's at an AGM. I had in mind each Torchlight fund would be set up for different purposes.ie No.25 may invest in Omaha property deal,while No.57 invests in bridging finnance on a Queenstown hotel.
so god knows what is going on. The way Kerr plays things close to his chest,I doubt it.!!!!

[winner69]

Hi ETC,

RECL - probably the most difficult. Best summary found so far is in the interim results presentation, where net assets are given at $61.8m.

This is based on a direct ownership interest in 175 individual properties valued at $63.1m, property finance receivables of $9.4m and external loans of $10.7m. Impairments from here are probably mostly limited to the few remaining finance receivables, so perhaps another $5m of impairments to come? Leaves value of the ex-Marac portfolio at $56.8m.

AND

However, on top of the distressed "bad bank" assets, they now also have responsibility under the management agreement to manage Marac ($142m?) of property finance receivables. For this, they receive $11m up front, but (as I understand it) Marac can claim back losses of up to $33m. If anything, I would rate this deal as a negative transaction overall for PGC, but, for starters, give it a zero.


Not really reading the Interim peoperly I now see the light of day - there are 2 parts to this part of RECL (I have split out and put an AND in your post Lizard) but who knows how much they will get back from the $61m in the books. You seem to think all but $5m Liz. The bad part they took on must be bad if they write off the capitalised interest last year

The other part is more intriguing. Has the $11m already been included in PGCs books which if so means they only get the $200k management fee each year whle exposed to fronting up to cover any further losses. As you say Lizard negative transaction here I think

Anyway clear as mud now - I think I understand

[Lizard]

The impaired interest comes from the property finance receivables and they only have $9.5m of those left (which is probably an NPV valuation including interest over life of loan and hence why interest is recorded then written off each year), as the rest have either been converted to cash or to a direct property ownership, hence why I say only $5m. The rest is properties which would hope had been valued at a fair, if not cheap, price. However, not clear what state the properties are in - could be some are unfinished developments (might explain the borrowings).

The $11m is somehow covered by a 5 yr, zero coupon bond - found somewhere in the notes.

[Lizard]

Huh, thanks for that percy. I just assumed that PGC were managing the loans. Is that what the 27 million P Note is for payment for the property in RECL?

Yes. Started out at $50m. They have been paying it down as they cash up the loans.

[Balance]

Anyway clear as mud now - I think I understand

That's how George likes it for now. Muddy so others cannot see but he can.

Things will become clear soon though.

[ETC]

Yes. Started out at $50m. They have been paying it down as they cash up the loans.

Thanks for that Lizard. I assumed that MARAC wouldn't just give PGC its "bad" property book, they'd have to pay for it.

Also thanks to everyone for participating. While the value of PGC still remains uncertain at least I now have a better understanding of the parts.

[corlemar]

I've been watching and reading the last cple of days posts with great interest.....and value the input you have all put in. I think the last two posts by Balance and ETC, sum it all up.

1) I agree with ETC, MARAC needed to offload the "bad" property book, to help it transition to BSH and ultimately they hope a banking licence. Whether it be GK or PGC or whoever pulling the strings, they wouldn't do it unless there was something in it for them $$$. As was the case when Torchlight (I think it was) helped SCF out, before they went into receivership, they would've been getting some nice fees from that, and only last week they were interested in taking the good stuff from SCF....

2) As Balance has says, it will all become clear soon enough, especially with the PGW completion and then the BSH distribution....Like most of the posts, it is hard to put a clear figure on what PGC is worth now and post consolidation/distribution. However, on numerous comments from management we keep hearing "providing and maximising shareholder value" ....IMHO i think they will endeavour to do that, especially given the capital raising that took place in 2009.

Hold onto your seats the next few months to year end will be interesting !

[winner69]

However, on numerous comments from management we keep hearing "providing and maximising shareholder value" ....IMHO i think they will endeavour to do that, especially given the capital raising that took place in 2009.

Hold onto your seats the next few months to year end will be interesting !

Good summary - yes the muddied waters are looking clearer

Interesting phrase "providing and maximising shareholder value" (what they are supposed to do anyway) but a phrase that is more commonly used these days by companies trying the make the best of a bad situation .... more like how do we recover some of the shareholder value we have lost over the years

Does suggest they are trying to do something so things shouldn't get any worse eh

[SCOTTY]

Any ideas as to what will happen to the unsold PGW shareholding?:

Distribute to PGC shareholders?
Sell on market?
Sit on them?
Is there a buyer allready lined up @ 60c?
Something else?

[percy]

I expert it will make the basis of "Torchlight RURAL Fund No.1 LP".lol

[corlemar]

Good summary - yes the muddied waters are looking clearer

Interesting phrase "providing and maximising shareholder value" (what they are supposed to do anyway) but a phrase that is more commonly used these days by companies trying the make the best of a bad situation .... more like how do we recover some of the shareholder value we have lost over the years

Does suggest they are trying to do something so things shouldn't get any worse eh

You're on the money Winner69, yes the management should already be maximising and providing shareholder value, though following the poor management at and around the time of the capital raising, and even since new management has come along, PGC has performed very poorly relative to the NZX....and like you suspect the mangement will be debating/decided how to return value to shareholder.

[corlemar]

Any ideas as to what will happen to the unsold PGW shareholding?:

Distribute to PGC shareholders?
Sell on market?
Sit on them?
Is there a buyer allready lined up @ 60c?
Something else?

Personally, I would like to see them distributed back to shareholders of PGC, though I can't see that happening what with the distribution of BSH and the consolidation of new PGC shares...all seems a bit messy with another distribution of shares, would it not ?? Having said that, a couple of points to note and apologies if this has been mentioned in previous posts.

1) PGC imo must've been pretty desperate to get rid of PGW, for the following reasons. They had them valued in their book at what $0.80c, so they tie up a deal with Agria before any announcement to the market to sell their entire holding at 25% less than what they had valued them at. Why would you do that given they've been cornerstone shareholder of PGW for so long? Do they need the cash to reduce debt or do/did they realise that PGW was sinking, afterall PGW hadn't paid a dividend for sometime ?

2) Knowing that Agria only wanted 50.01% PGC must've had a good idea that with their holding and that of Agria, then without doubt there would've been scaling back - as we know now this is going to happen. Therefore i think PGC would already have had some back up plan following the deal on PGW/Agria.

If we look at the big picture PGC (wealth management - post consolidation) BSH (bank) i simply don't think that PGW fits either and for that reason they wanted shut of PGW, hence why they were willing to take a chunky loss on them.

Perhaps they'll sell and distribute that portion back to PGC shareholders.....to return some shareholder value....whatever happens i wouldn't be surprised to see some activity with PGW fiannce following Agria taking contorl, maybe BSH (rural heartland bank and all...) just a thought

[percy]

thanks winner69 and Lizard.
The sum of parts = $290mil.Where has $110mil gone?
Used to be a NTA of approx 50cents a share.ie with just over 800 mil shares $400mil of assets. Now only $290mil.One big difference.! ????

But wait ! there's even more money to account for.There was 430,926,00 of equity at Dec,not $400mil,so another $30mil to account for?

[winner69]

But wait ! there's even more money to account for.There was 430,926,00 of equity at Dec,not $400mil,so another $30mil to account for?

Not quite right percy - it was actually $430,926,123.45

Of that $39m are intangibles - a lot related to Marac goodwill and stuff so all that has gone from PGC now anyway. Goodwill often the difference between what one actually paid and the assets you actually bought

But we don't want to get into that discussion do we percy

And don't forget that equity number includes all the PGW shares valued at 60 cents

Equity / NTA and all those things odn't mean much when trying to assess market values do they ... you know that .... all accounting stuff eh often miles away from the real world

The picture through the muddied waters is getting clearer by the day

[percy]

The picture through the muddied waters is getting clearer by the day

yeah right !!!!!lol

[winner69]

yeah right !!!!!lol

Yes I now do think I have it sussed

[Football Predictor]

[QUOTE=corlemar;343879]Personally, I would like to see them distributed back to shareholders of PGC, though I can't see that happening what with the distribution of BSH and the consolidation of new PGC shares...all seems a bit messy with another distribution of shares, would it not ?? Having said that, a couple of points to note and apologies if this has been mentioned in previous posts.

The PGW shares remaining will be distributed pro-rata to PGC shareholders

[Newman]

Any ideas as to what will happen to the unsold PGW shareholding?:

Distribute to PGC shareholders?
Sell on market?
Sit on them?
Is there a buyer allready lined up @ 60c?
Something else?

I guess the remaining PGW shares (about 10%) will be sold to Agria (directly or via a swap of PGW's finance company). Agria is allowed to have up to 60% of PGW.

[ETC]

To be able to break up PGW into its parts Agria will need 75% shareholder approval.

They in theory can purchase 60% of the stock, PGC will have about 10% so all they'll need to do is convince 5% of PGW's shareholders that it is a good idea. I wonder if they can do it?

[percy]

well, !!!! www.chrislee.co.nz taking stock makes really interesting reading.

[janner]

Interesting indeed Percy. Thanks for the link.

[ETC]

Found these part especially interesting...

"It is also on the cusp of a decision to take over PGG Wrightsons Finance’s loan book, thus solving PGGWF’s maturity mismatch this year, and providing Marac with a useful cash-flow loan book in the rural sector."

"And when all this has been done, PGC, stripped of Marac and PGGW, will consolidate its shares on a basis of around one new share for four old shares, presumably driving PGC’s share price to around 30 – 40 cents, suggesting the new PGC can make $5 – 10m per year."

[percy]

Well what I would love to know is who ended up with the $20mil early repayment penalty SCF had to pay Torchlight? The investor's of Torchlight, or the manager.As PGC's Perpetual Asset Management[PAM] own the management rights to Torchlight it would make a big difference to PGC's earnimgs.Take them from Chris Lee's $5 to $10 mil to $25 to $30 mil.Now that would be fun.!!!!! lol.

[winner69]

Well what I would love to know is who ended up with the $20mil early repayment penalty SCF had to pay Torchlight? The investor's of Torchlight, or the manager.As PGC's Perpetual Asset Management[PAM] own the management rights to Torchlight it would make a big difference to PGC's earnimgs.Take them from Chris Lee's $5 to $10 mil to $25 to $30 mil.Now that would be fun.!!!!! lol.

Good question percy

If it was beneficial to PGC wouldn't it have appeared somewhere in the interim accounts to December .... if there was $20m in there somewhere the result was even more of a disaster than reported .... even on a 'normalised' business

Think sbout in light of the other comments re transparency made by others!

The muddied waters even now clearer than last week

[percy]

Good question percy

If it was beneficial to PGC wouldn't it have appeared somewhere in the interim accounts to December .... if there was $20m in there somewhere the result was even more of a disaster than reported .... even on a 'normalised' business

Think sbout in light of the other comments re transparency made by others!

The muddied waters even now clearer than last week

Do not know where,but what I really enjoyed was the fact Kerr got it added to the deal in the first place.!!!
TO winner69.Do you like Thai food.? I have PGC in Aussie and see chairman is Shane Tanner ,same as Vision Group holdings which you have followed.
Question: Is the company or is it the chairman who is the turkey.?

[corlemar]

Well what I would love to know is who ended up with the $20mil early repayment penalty SCF had to pay Torchlight? The investor's of Torchlight, or the manager.As PGC's Perpetual Asset Management[PAM] own the management rights to Torchlight it would make a big difference to PGC's earnimgs.Take them from Chris Lee's $5 to $10 mil to $25 to $30 mil.Now that would be fun.!!!!! lol.

Logically it would seem that it ended up in Torchlight, afterall they were taking the risks. PAM is there to manager, is it not?....as we've all heard recently, now PGW/AGRIA is sorted it will become very clear, very soon as to what direction PGC heads in....

[percy]

Logically it would seem that it ended up in Torchlight, afterall they were taking the risks. PAM is there to manager, is it not?....as we've all heard recently, now PGW/AGRIA is sorted it will become very clear, very soon as to what direction PGC heads in....

corlemar.The post was really just trying to stir comments,and cause trouble.Having a bit of fun.

[corlemar]

corlemar.The post was really just trying to stir comments,and cause trouble.Having a bit of fun.

Fairpoint.....that aside, it will be interesting to see what numbers PGC post for year to 30 June whether it's profitable or not

[Xerof]

Get real you guys

No one would be stupid or desperate enough to agree to a 20% break fee

Chris Lee talks a load of bollocks and has no credibility

[percy]

Get real you guys

No one would be stupid or desperate enough to agree to a 20% break fee

Chris Lee talks a load of bollocks and has no credibility

I think you will find they were and they did.
I have always enjoyed Chrie Lee's comments,often hard hitting,well thought out, and experience backing them up.

[Xerof]

OK Percy
You know best. I await the accounts with immense interest to see the 20million in the P&L

As for Lee - each to his own

[POSSUM THE CAT]

Percy what about his recommendations of South Canterbury Finance & Strategic Finance amongst others

[percy]

Percy what about his recommendations of South Canterbury Finance & Strategic Finance amongst others

He makes informed statements each and ever week..I make a lot of mistakes,I suppose you have too,but to make informed comments on a lot of difficult subjects,makes me appriciate the thought he puts in.He does not walk away from subjects .If you look at the likes of Brian Caynor,who is always right 2 years after the fact,Lee coments on current issues.That is brave.I may not agree with some of his views,but I always enjoy ready him. A breath of fresh air.In the case of South Canterbury and Strategic,I think it was a case of false figures being presented.ie lies,false accounting etc. I have found myself court out when directors lie,and we have seen Feltex and too many other companies tell lies .Lee knew Terry Butler at Dominan Finance was some one to stay clear of.No warnings from our Brain though.

[Newman]

He makes informed statements each and ever week..I make a lot of mistakes,I suppose you have too,but to make informed comments on a lot of difficult subjects,makes me appriciate the thought he puts in.He does not walk away from subjects .If you look at the likes of Brian Caynor,who is always right 2 years after the fact,Lee coments on current issues.That is brave.I may not agree with some of his views,but I always enjoy ready him. A breath of fresh air.In the case of South Canterbury and Strategic,I think it was a case of false figures being presented.ie lies,false accounting etc. I have found myself court out when directors lie,and we have seen Feltex and too many other companies tell lies .Lee knew Terry Butler at Dominan Finance was some one to stay clear of.No warnings from our Brain though.

Given that little analytical business information is available from the traditional media, I think Chris Lee and his business partner Michael provide valuable views and analyses on both historical and current events, through their newsletetrs on Mondays and Thursdays. As human beings Chris and Michael make mistakes. But remember, their newsletters are delivered to your email addresses free of charge!

Newspapers, including the National Business Review that you have to pay to read, are more and more becoming a sounding board, providing very surficial information, often by repeating what company announcements said. Thet are either lazy or incapable to analyse the cause and possible efects of what happened. Sometimes they act like politicians or business laymen, for example, by accusing foreign ownership of land or othe properties in NZ. Brian Gaynor used to be good at analysing business events, as shown in his Herald column on Saturdays. But since this year he has become less sharper than before. It looks that he just writes to complete tasks.

[percy]

Given that little analytical business information is available from the traditional media, I think Chris Lee and his business partner Michael provide valuable views and analyses on both historical and current events, through their newsletetrs on Mondays and Thursdays. As human beings Chris and Michael make mistakes. But remember, their newsletters are delivered to your email addresses free of charge!

Newspapers, including the National Business Review that you have to pay to read, are more and more becoming a sounding board, providing very surficial information, often by repeating what company announcements said. Thet are either lazy or incapable to analyse the cause and possible efects of what happened. Sometimes they act like politicians or business laymen, for example, by accusing foreign ownership of land or othe properties in NZ. Brian Gaynor used to be good at analysing business events, as shown in his Herald column on Saturdays. But since this year he has become less sharper than before. It looks that he just writes to complete tasks.

Newman.Thank you for your post.You expressed exactly what I felt,but could not express in words.I still read NBR and I think it is a waste of money.
The only person now who is worth reading is Chalkie and the new one is not as sharp as the last one.The Sunday Times usually comes up with a good article once a year.We are poorly served.thank goodness there are [some] intelligent posters on sharetrader.

[Balance]

He makes informed statements each and ever week..I make a lot of mistakes,I suppose you have too,but to make informed comments on a lot of difficult subjects,makes me appriciate the thought he puts in.He does not walk away from subjects .If you look at the likes of Brian Caynor,who is always right 2 years after the fact,Lee coments on current issues.That is brave.I may not agree with some of his views,but I always enjoy ready him. A breath of fresh air.In the case of South Canterbury and Strategic,I think it was a case of false figures being presented.ie lies,false accounting etc. I have found myself court out when directors lie,and we have seen Feltex and too many other companies tell lies .Lee knew Terry Butler at Dominan Finance was some one to stay clear of.No warnings from our Brain though.

You obviously have not heard about Chris's "special" relationships with Hanover, Strategic Finance and SCF.

[percy]

You obviously have not heard about Chris's "special" relationships with Hanover, Strategic Finance and SCF.

I think he disclosed those relationships.In particular I think a relative worked for Kevin Podmore.

[Balance]

I think he disclosed those relationships.In particular I think a relative worked for Kevin Podmore.

No - Chris makes out that he has direct lines of communications with the likes of Hubbard etc so he has special insight into the character, integrity and capabilities of these individuals.

How wrong was he.

And BTW, assessing the characters of people you deal with is part of the credit assessment game.

[POSSUM THE CAT]

Percy If a mug like me with 2years secondry education could read SCF & Strategics prospectous & see the flaws why could the the supposedly highly educated financial advisor Chris Lee not see them. My opinion is if Chris Lee recommends anything run a mile away. I am only pointing out two of his many mistakes. I believe that some were so bad he reimbursed the investors.

[Balance]

Percy If a mug like me with 2years secondry education could read SCF & Strategics prospectous & see the flaws why could the the supposedly highly educated financial advisor Chris Lee not see them. My opinion is if Chris Lee recommends anything run a mile away. I am only pointing out two of his many mistakes. I believe that some were so bad he reimbursed the investors.

IMO, Chris is Chris - a typical used car salesman pretending to be a financial advisor. Sadly, there are those out there who thinks that the sun shines out of his backside and quotes him, thinking that he actually understands risks and rewards!

[percy]

Thanks Possum the cat and Balance.In future I trust we can all share your experience and knowledge with greater analysis and more detailed posts from you both,so we do not need to read Chris Lee.!!! lol

[ETC]

I’m unsure who Chris Lee is but his sentiments seem to reflect the majority of posts in this thread.

PGC has an uncertain future and George Kerr could make or break the company.

BSH has potential as long as management keep true to their word of steady sustainable growth.

At the moment I’m just interested to see how much value the break up will bring to shareholders, I purchased shares after the rights issue and by my calculations I’ll lose about a third of the money I put in.

[Balance]

Thanks Possum the cat and Balance.In future I trust we can all share your experience and knowledge with greater analysis and more detailed posts from you both,so we do not need to read Chris Lee.!!! lol

Have a read of this and you may understand why Chris Lee is worse than a used car salesman.

http://www.stuff.co.nz/business/money/2161440/Advice-and-adversity


Advice and adversity
BY ROB STOCK Last updated 09:19 09/03/2009

"It appears to be a collection of investments without any structure, and looks more like something from a DIY investor, rather than one put together by an investment professional."

That's the opinion of senior Spicers' financial planner Jeff Matthews on a portfolio created for retired Southland farmers Clare and John Lindsay on the advice of high-profile Kapiti Coast adviser Chris Lee.

In an assessment paid for by the Lindsays in a bid to get Lee to compensate them for losses, Matthews said: "It is pretty obvious you have a poorly constructed portfolio, which has exposed you to considerable capital loss from investments that should be considered safe.

"A well-constructed bond portfolio should give investors peace of mind and a regular income, and you have neither."

And peace of mind is what the Lindsays say they were after, saying they told Lee when they first contacted him back in 2005 that they considered themselves conservative investors, though they have no written proof of that, and Lee says he does not keep records of clients' risk profiles.

But the Lindsays have been left holding virtually worthless Babcock & Brown subordinated notes, as well as capital notes in St Laurence (in moratorium), debentures in Dorchester Finance (in moratorium), Hanover Capital preference shares (in moratorium), debentures in North South Finance (in moratorium) and two tranches of debentures in Strategic Finance (in moratorium).

The couple said they were private people and asked for the sums involved to be kept confidential, but felt they needed to tell their story because they were infuriated to see Lee continually quoted in the media and criticising others when they feel so badly let down.

"You read his blogs and feel he's a really good guy that is there for the investors, but we feel that is just an illusion," said Clare Lindsay.

Around 60% of their portfolio was in finance companies. Around 30% was in investments with either no rating from a respected international ratings agency, or a rating below investment grade.

Nine of the 18 non-cash investments in their portfolio are in serious trouble, with another bonds in Nufarm trading at a discount to face value.

Missing, noted Matthews, were the large weightings of highly rated, liquid corporate bonds and government stock which would usually underpin a portfolio for conservative investors.

The result has been a big drop in the Lindsays' income.

Lee said that although he sympathised with investors who had lost money, financial markets deteriorated further and faster than anyone forecast. That badly affected and in some cases destroyed reputable organisations that were previously well thought of.

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"No financial strategy, other than to buy government stock and use bank deposits only, has been successful," he wrote to the Lindsays earlier this year.

Clare Lindsay said the couple felt they had been naive. They feel they handed over the management of their retirement nest eggs too casually something they would not have done with the management of their farm.

They have not ruled out legal action, but feel they are not wealthy enough to risk more on a court battle for compensation.

The Lindsays have asked Lee to buy back the investments they say were never suitable for them Hanover Capital preference shares and St Laurence capital notes, both of which are lower ranking than debentures as well as their investments in Strategic Finance, made in late 2007, when they say Lee should have realised there were high risks around the company.

Lee has told the couple he will not do so.

The couple also feel betrayed by Lee's public criticism of companies he had advised them to invest in.

In March 2006 Lee invested the Lindsays' money in Hanover Capital, but in October the next year he withdrew support for the company and wrote in his public blog: "Mark Hotchin and Eric Watson are not bankers, and not the sort of people one would regard as low-risk conservatives."

Lee told the Sunday Star-Times he could understand the criticism, but said his outspoken stances and advice to finance companies had been heeded in cases which had helped preserve the company. He declined to say which firms had been so preserved.

Lee said: "They want to put their side of the story to you, which is their right. It is not something I would do, but I guess it is their choice.

"I won't comment on them individually, but I do accept we are in very stressful times, and that people have every reason to be outraged by losses they have and anyone who has lost 10% of their money would be outraged, but most of the country that have invested money would have lost more.

"The reality is we haven't got everything right, but we have been a little bit more right than wrong."

He estimated that about 12% of $1.2 billion in clients' money was in frozen finance companies, the bulk in Strategic and St Laurence. The outcome for investors in those is uncertain.

The Lindsays say that when they went to Lee in 2005, they thought they were taking on an adviser who would build a portfolio for them. The only difference to other advisers was that they would manage their own paperwork.

Lee said his firm did not work like that. It did offer advice, but as a sharebroker with around 10,000 clients, it did not take responsibility for clients' portfolios. Instead, advice was given when sought on individual securities, and free consultations given on portfolios, Lee said.

"We can't and don't run portfolios for people. We don't charge them fees [Lee is a commission-only adviser] or sit down with people in Auckland."

And at the end of the day, investors were making their own decisions.

In a letter to the couple in early February, Lee said: "Never did I make your decisions. Not once have I contacted you, or any client seeking to persuade you to invest money in anything. Never have I invested your money for you. You invested your money."

Clients are contacted through email alerts, but it is they who pick up the phone and ask whether new issues are suitable for them, or what they should do when an investment they have matures, he said.

In one letter to the Lindsays, Lee does appear to acknowledge that the couple were concerned over risk, saying he believed they expressed their needs as "being above bank rate interest on your capital with as little risk as possible", reflecting their retirement and decision to defer buying a house.

Lee famously offered to compensate clients he had advised to invest in Provincial Finance, which was the first finance company to collapse, back in 2006.

But Lee said that was because he could see that there had been flaws in his researching of the company. It should not be interpreted as an offer to make up for any losses resulting from advice his firm gave, he said.

[percy]

Yes I remember well ready that article.

[percy]

If PGC buy depth is anything to go by - PGC is about to recover - Pundits have figured out that BSH shares are going to be in demand as they head into the NZ50?

Yes I think you are correct.What a lot of people forget is they [directors and management] have achieved what they set out to do,and I think BSH must now be "well positioned' for a banking licence,which will enable it to both attract funds,and pay less for those funds.One of your earlier posts you pointed out that banks trade at 2 or 3 times NTA,so we have that to look forward to.I am hopeful that they buy PGWF as it would be a good fit.From what I have read they have the balance sheet to afford buying it without coming to shareholders for funds. I am mindfull that PGC is much more speculative,but again we only need to look at George Kerr's history to see he has made his wealth from being a very astute deal maker.
All the time this has been going on, Kerr I expect has been doing deals,while Marac and the other parts of BSH have continued their day to day profitable operations.

[winner69]

If PGC buy depth is anything to go by - PGC is about to recover - Pundits have figured out that BSH shares are going to be in demand as they head into the NZ50?

Belg .... are you saying that punters are buying PGC shares to get some BSH on the cheap .... or is the pent up demand for PGC shares driven from what punters think George is going to do for PGC

[rabcat]

Yes I think you are correct.What a lot of people forget is they [directors and management] have achieved what they set out to do,and I think BSH must now be "well positioned' for a banking licence,which will enable it to both attract funds,and pay less for those funds.One of your earlier posts you pointed out that banks trade at 2 or 3 times NTA,so we have that to look forward to.I am hopeful that they buy PGWF as it would be a good fit.From what I have read they have the balance sheet to afford buying it without coming to shareholders for funds. I am mindfull that PGC is much more speculative,but again we only need to look at George Kerr's history to see he has made his wealth from being a very astute deal maker.
All the time this has been going on, Kerr I expect has been doing deals,while Marac and the other parts of BSH have continued their day to day profitable operations.

Well said I agree with you totally. Now if what you have said comes true then it sounds like we can both retire some time soon!
Interesting to compare the management/ governance of PGC to PGW. Jeff Greenslade and Co have done exactly as they have said and will prosper and well PGW are ........hmmmmm.

[geezy]

PGC/BSH is the only reputable finance (and i mean possibly bank too) left in NZ besides kiwi bank ? no? :)

[percy]

PGC/BSH is the only reputable finance (and i mean possibly bank too) left in NZ besides kiwi bank ? no? :)

I do not know for sure but F&P Finance,and UBC both have excellent reputations.

[Newman]

Has anyone got a copy of the IN SPECIE PROSPECTUS as announced this morning? I just checked www.business.govt.nz but could not find it.

PGC did not say anything on whether or not it would distribute the proceeds of its PGW shares sold to Agria. Has anyone received payment from Agria for his PGW shares sold?

[nwood]

Has anyone got a copy of the IN SPECIE PROSPECTUS as announced this morning? I just checked www.business.govt.nz but could not find it.

PGC did not say anything on whether or not it would distribute the proceeds of its PGW shares sold to Agria. Has anyone received payment from Agria for his PGW shares sold?

Transfers of payments from Agria has been made (according to Computershare) I expect they will be received overnight.

[corlemar]

anyone know what Agria finally took ?

[winner69]

Has anyone got a copy of the IN SPECIE PROSPECTUS as announced this morning? I just checked www.business.govt.nz but could not find it.

PGC did not say anything on whether or not it would distribute the proceeds of its PGW shares sold to Agria. Has anyone received payment from Agria for his PGW shares sold?

Notice said it had been submitted for registration ...sounds like that could be today so they can mail it out pretty quickly

[MANDRAKE]

From todays announcement...

"...any remaining PGW shares, are surplus to core business requirements going forward. The PGC board is therefore considering returning surplus cash and PGW shares to PGC Shareholders and/or applying those assets to acquire additional shares in BSH and returning those BSH Shares to PGC Shareholders."

I wonder which option would be the best for PGC shareholders? Personally not keen on holding PGW shares ATM - would rather have loads of cheap BSH shares. But then again, it's probably better to let each SH use the cash as they see fit.

Also it depends on what price PGC can get for the remaining PGW shares... might have to wait for the full take over offer??

[ETC]

If PGC does divest the remaining 8.3% of PGW to shareholders we should get 77 PGW shares for every 1000 PGC shares we hold.

Also PGC should use the money from Agria to pay off the 27 million it owes to Marac.

[ETC]

Not sure how valid this article is but it puts PGC's net assets at 195 million after PGW and Marac are taken out of the equation.

http://www.stuff.co.nz/business/industries/4954521/PGC-may-distribute-Wrightson-stake

[corlemar]

If PGC does divest the remaining 8.3% of PGW to shareholders we should get 77 PGW shares for every 1000 PGC shares we hold.

Also PGC should use the money from Agria to pay off the 27 million it owes to Marac.

ETC, do you base your calculation on shares held prior to the consolidation?

[ETC]

ETC, do you base your calculation on shares held prior to the consolidation?

Yep, that's 77 shares per 1000 before the consolidation. Afterwards it'll be 291 shares per 1000. Though the amount of shares you receive won't really change.

I'm hoping that PGC might be able to sell its remaining shares to Ngai Tahu, though i'm unsure if they'd want them.

[percy]

Not sure how valid this article is but it puts PGC's net assets at 195 million after PGW and Marac are taken out of the equation.

http://www.stuff.co.nz/business/industries/4954521/PGC-may-distribute-Wrightson-stake

The information memorandium states"PGC will have net assets of approximately based on the proforma statement of $195mil @ 31/12/11."
The record date is 27/5/11
Distribution date 30/5/11
So the stuff article is correct.

[winner69]

The information memorandium states"PGC will have net assets of approximately based on the proforma statement of $195mil @ 31/12/11."
The record date is 27/5/11
Distribution date 30/5/11
So the stuff article is correct.

You would hope Stuff was right - after all they were reading the same stuff as you percy

The question is though what is the real value of these assets .... the market doesn't see $195m worth at the moment

[percy]

You would hope Stuff was right - after all they were reading the same stuff as you percy

The question is though what is the real value of these assets .... the market doesn't see $195m worth at the moment

good stuff!!! winner69 I am sorry to admit I do not know what the assets are really worth,or what the market will value them in a years' time.My concern has always been that one ill informed ChCh broker quoted some very low figure,which I knew was not right.In all my posts I have stated that less than half of PGC's assets were going into BSH.I may have been slightly wrong,but that broker was miles out!!!. Country miles out.!! However you,me and other sharetrader posters are a lot better informed than that broker's clients.

[ETC]

Maybe someone down in Christchurch can go to the GM and ask them how they came up with the figure of $195m? I'd be very interested to hear the answer.

[Lizard]

Maybe someone down in Christchurch can go to the GM and ask them how they came up with the figure of $195m? I'd be very interested to hear the answer.

Looks reasonably clear in the documentation (http://www.pgc.co.nz/net/shareholder-centre/reports.aspx) (schedule 4, pg 21). Amount is $165.1m excluding intangible and deferred tax assets.

However, all the figures are at least 4 months old now, so some limitations around that. The main assets are the PGW shares, $83m (at 60cps), the EPAM investments (EPIC and Torchlight Fund) $30m and the RECL properties $63m (properties acquired through security enforcement). All of these values could vary over time, as realisable value of non-current assets is always a tricky area in arms-length valuation.

[percy]

Thanks Lizard.As per all assets if someone can earn big returns on those assets the market should pay a premium to NTA.However if those assets do not show good returns they will lose value and the market should want a discount.Bit like buying chaff.Fresh chaff you pay a premium,while chaff that has been through the horse comes a little cheaper.!!!
What we all are waiting to see is what return on those assets Kerr can earn.Then we will know whether we have brought fresh shaff or just horse s..it.!!!

[winner69]

percy ... you mentioned a while ago Torchlight 1 Torchlight 2 and maybe many more Torchlights to come

Have you worked out how many Torchlights PGC own and how many are George's private investment vehicles?

Reading between the lines in a NBR article Torchlight does not always necessary mean PGC

The muddied waters are pretty clear now

[Lizard]

Reading between the lines in a NBR article Torchlight does not always necessary mean PGC


From what is available on the Companies web-site, there is nothing obviously tricksy that I can see. The Limited Partnerships will have Torchlight (fund 1 or 2) as the General Partner and any number of (wealthy investor) limited partners who will have an ownership interest. PGC interests are represented as a limited partner via 15% of capital. That means that IF (say) Torchlight Fund made $20m on the SCF loan, then PGC's share of the profit via Perpetual/Torchlight limited partnership is $3m gain on investment plus the management fees and performance fees earned by Torchlight as General Partner/Manager. Maybe George is a Limited Partner too, though not sure if that would need to be disclosed in related party?

For now, we don't have any info on Torchlight performance that I can see - it's still valued at the amount invested in the fund, i.e. $15m. There have been some figures for transaction and management fees, but early days and no % fees that I can find. Out of interest, the receivers reports for SCF show about $109m in liabilities to prior chargeholders (that include Torchlight amongst others), and then second report shows $175m paid out to prior chargeholders... so maybe more than Torchlight got a windfall if I read that aright?

[percy]

percy ... you mentioned a while ago Torchlight 1 Torchlight 2 and maybe many more Torchlights to come

Have you worked out how many Torchlights PGC own and how many are George's private investment vehicles?

Reading between the lines in a NBR article Torchlight does not always necessary mean PGC

The muddied waters are pretty clear now
Well,yes, well, would you believe I think NBR and I are both wrong....Ha Ha.Would appear there is just the one,part owned by PGC and managed by PGC.The link Lizard gives ,shows there is only one.Now,I do not think PGC shareholders would be very happy buying ALL ? kerr's manage funds interests, to find there were others that Kerr did not put into the deal. This is why Kerr became the major shareholder in PGC.Sold his fund management business into PGC so there was no conflict of interest.

[percy]

From what is available on the Companies web-site, there is nothing obviously tricksy that I can see. The Limited Partnerships will have Torchlight (fund 1 or 2) as the General Partner and any number of (wealthy investor) limited partners who will have an ownership interest. PGC interests are represented as a limited partner via 15% of capital. That means that IF (say) Torchlight Fund made $20m on the SCF loan, then PGC's share of the profit via Perpetual/Torchlight limited partnership is $3m gain on investment plus the management fees and performance fees earned by Torchlight as General Partner/Manager. Maybe George is a Limited Partner too, though not sure if that would need to be disclosed in related party?

For now, we don't have any info on Torchlight performance that I can see - it's still valued at the amount invested in the fund, i.e. $15m. There have been some figures for transaction and management fees, but early days and no % fees that I can find. Out of interest, the receivers reports for SCF show about $109m in liabilities to prior chargeholders (that include Torchlight amongst others), and then second report shows $175m paid out to prior chargeholders... so maybe more than Torchlight got a windfall if I read that aright?

Do not mind if you read it right or not,speculation will mean I will have sweet dreams tonight.Instead of counting sheep I will count dollars.!!!

[Lizard]

Winner, not sure if you read this one on interest.co.nz:
Companies with NZ$1.7b covered by the extended Crown retail guarantee confident they can wean themselves off it (http://www.interest.co.nz/news/53068/companies-nz17b-covered-extended-crown-retail-guarantee-confident-they-can-wean-themselve)

Similar comments to what I saw when going through the books - although I didn't go through Wairarapa Building Society. Funny though - Combined Building Society has the best rating, but the greatest risk around re-investment rates. Wish we could get some update on that with data more recent than December-Jan when investors were probably still going for one more year under the guarantee and safer-than-the-bank.

Personally, find it difficult to believe that re-investment rate would stay the same for terms going beyond 31 Dec, as must at least be a proportion of debenture holders who were in there simply because of lower risk than banks at higher potential returns and will drift away without the guarantee.

[Balance]

Time to do a little reading for those who want to get an idea of value - the infor is all there. Interesting reading.

http://file.nzx.com/000/015/4954015.pdf

[percy]

How is this for an interesting thought.? BSH buys PGC's PGW shares by issueing BSH shares to PGC.BSH buys PGWF buy paying cash and PGW shares which PGW then cancels?I can't see anyone wanting hundreds of new PGW shareholders owning just a few shares.Does not sense.

[kizame]

Interesting thought Percy. But would it look good for a potential bank dealing in or trading shares?

[SCOTTY]

Interesting thought Percy. But would it look good for a potential bank dealing in or trading shares?

OK. Good thinking Percy and Kizame. What say PGC exchanges PGWF for their PGW shareholding (and maybe some cash as well). The PGW shares are then cancelled which tightens up the PGW share register. BSH issues shares to PGC for the PGWF stake. The new BSH shares are then distrbuted to PGC shareholders as an extra bonus issue?

[percy]

Kizame. The out come for BSH is they get control of PGWF,which would be a great acquisition for them.I am sure everyone would be happy that they got it rather than the machanics of the deal.
Scotty.I think PGC sharehoders would prefer your deal,where they would recieve the extra BSH shares.
Has any one noticed how we are all being more positive in our posts on PGC.?

[RazorX]

Hi guys

I had a bit of a thought I wanted to pass by you. (Amazing what interesting ideas arrive in your head during work :))

Would it be worth buying extra PGC shares (@ say 30 cents) before the record date of 27 May so that both shareholdings in PGC and BSH get boosted post distribution?

Would that be a worth while exercise?

Thanks

Razor

[percy]

Hi guys

I had a bit of a thought I wanted to pass by you. (Amazing what interesting ideas arrive in your head during work :))

Would it be worth buying extra PGC shares (@ say 30 cents) before the record date of 27 May so that both shareholdings in PGC and BSH get boosted post distribution?

Would that be a worth while exercise?

Thanks

Razor

I am only guessing here.It looks as though people are buying PGC shares to get the BSH holding.It appears to me that institutions will buy BSH because it will go into the top 50 index.retail investors will be keen to buy shares in a bank.So very strong demand for BSH shares.
No one is too sure of PGC.Will people sell PGC once they have their BSH shares.???
Today you can buy 2680 BSH shares at 79cents for total cost of $2117.20.Or you could buy 10,000 PGC shares for $3,100.which would mean you end up with 2680 BSH [$2117.20] plus 2680 PGC shares costing you $982.80 or 36.67cents per new PGC share.
Now we know approx what price BSH will trade at say 79cents.
How about the new PGC.Well there will be approx 216.62mil shares on issue.So market cap at 36.67cents will be $79.43 mil with NTA of approx 90 cents.

[Xerof]

Xerof said:
No one would be stupid or desperate enough to agree to a 20% break fee


Percy said:
I think you will find they were and they did.


Sorry mate, but
the Receiver said:
Mr Downey confirmed this week that Torchlight was repaid $100 million plus interest of $6 million immediately following South Canterbury’s receivership.


so, maybe say a bit more than half was interest and a bit less than half was the break fee, maybe 2.5% is nearer the mark?

[percy]

Sorry mate, but

so, maybe say a bit more than half was interest and a bit less than half was the break fee, maybe 2.5% is nearer the mark?

well done.will you please let chris lee know..!!!!!!

[Xerof]

Ahh, is that where you got the 'gospel truth' from percy - let me know when he publishes his retraction......


as you know I don't bother with anything Lee says

[percy]

Ahh, is that where you got the 'gospel truth' from percy - let me know when he publishes his retraction......


as you know I don't bother with anything Lee says

At the last PGC meeting I attended,G Kerr was asked about Torchlight loan to SCF.Kerr stated that a number of years ago Hubbard was the only person who would lend him money,but Hubbard took a "huge pound of flesh".!!! He was happy to repay the favour and also take a "huge pound of flesh." So when Lee mentioned a $20mil break figure,I took it Kerr had taken a "huge pound of flesh".I have no way of measuring a huge pound of flesh, And I doudt if any one will tell us,
so like you I am left to guess.

[Lizard]

I would still consider it a possibility that Torchlight was paid out loan plus interest "immediately after" but was then paid a break fee at a later date... after all, there is a fairly big discrepancy between the amount owed to prior chargeholders in the first report of $109m and the amount paid out later as per the second report of $175m - which, not coincidentally - roughly matches the amount of the crown loan to cover the prior chargeholders.

[Xerof]

Liz, if you get a hold of the NBR for last Friday, it was laid out by Downey exactly where the 175m went. Torchlight got 106m. End of story. It was a paid content story online, but I presume it will be in hard print

In fact, thats actually not end of story, because Fortress Australia are strongly rumoured to have had the lions share of the 100m loan to SCF, so Torchlight would only get a pro-rata share of the break fee. That would also tie in with numbers outlined in the in specie prospectus, which show Torchlight's value has barely moved ahead of the original 15m, maybe a mill or so at most.

[Lizard]

Thanks for that Xerof. I will try to find the NBR.

Torchlight and EPAM are at cost in those accounts (there is another .75m of other investments), so doesn't help as far as figuring out if the fund itself made anything.

Here's a June NBR article, that only confuses the ownership of the $100m further:http://www.nbr.co.nz/article/pgcs-torchlight-extends-south-canterbury-finance-100m-124210. (Reality is pretty clearly covered in PGC's release to the NZX of 28 June, titled "Torchlight - Media Release Clarification"). This part of the NBR release seemed relevant - I guess they could have got this from a search of the PPSR?


Torchlight now has a prior charge on up to $151 million or 7.2% of South Canterbury's assets under the company’s trust deed.


Agree that PGC itself would only get the benefit of 15% or less of any break fee via their investment in the fund. Though maybe they pick up some performance fees via their role as Manager.

[percy]

I have read the NBR article.
"All $100 million would mature on Nov 30,2011 and would be secured by a prior charge in the debenture tust deed.Mr.Downey confirmed this week that Torchlight was repaid $100 mil plus interest of $6 mil immediately following SCF's receivership". End of story? may be,may be not.!! No mention of break fees , so we are only guessing.I think I may have to ask G.Kerr at next meeting.Going from the notice of meeting there is no way of seeing "a pound of flesh".As Lizard noted it appears to only show the amount PGC put into Torchlight.Should we take only modest profit,one must ask why bother to take the risk of lending SCF $100mil.?

[corlemar]

I have read the NBR article.
"All $100 million would mature on Nov 30,2011 and would be secured by a prior charge in the debenture tust deed.Mr.Downey confirmed this week that Torchlight was repaid $100 mil plus interest of $6 mil immediately following SCF's receivership". End of story? may be,may be not.!! No mention of break fees , so we are only guessing.I think I may have to ask G.Kerr at next meeting.Going from the notice of meeting there is no way of seeing "a pound of flesh".As Lizard noted it appears to only show the amount PGC put into Torchlight.Should we take only modest profit,one must ask why bother to take the risk of lending SCF $100mil.?

Percy, i suspect that TIG would continue to take fees for funds loaned to SCF. In fact SCF going down the gurgler, was probably the worst news for TIG, cos it meant their investment was repaid immediately, and they could no longer clip the ticket on fees. You could never say there was no risk, but TIG was in the box seat with their funding to SCF, as they knew if it went down the toilet they would be paid out before anyone else.

[percy]

Percy, i suspect that TIG would continue to take fees for funds loaned to SCF. In fact SCF going down the gurgler, was probably the worst news for TIG, cos it meant their investment was repaid immediately, and they could no longer clip the ticket on fees. You could never say there was no risk, but TIG was in the box seat with their funding to SCF, as they knew if it went down the toilet they would be paid out before anyone else.

Agree.There was talk by Chris Lee that Kerr extracted a huge break fee [$20mil].I would be interested to know if there was a break fee,and if so how much,and how much went to the manager[PGC]???

[Xerof]

I try to be subtle but accurate when I quote figures in my posts, especially in the interests of ensuring facts are presented........percy mate, read post number 753, which has a suggested break fee. Scout's honour........


As you say you are going to the meeting, why don't you directly ask the question of PGC 'where in your accounts to the end of Dec 2010 can I find the $20 million break fee Chris Lee says you gouged from SCF', instead of wishfully hoping that Chris Lee knows what he is talking about - he doesn't.

I can't answer your final question, as I don't know, but to put it in perspective with the fabled 20 million (which is really actually 6m) - refer to Receiver's quote - depending on how much of the 100mill Torchlight Security Trustee actually lent to SCF (and as I have said earlier, it is strongly rumoured to be only a small % of the total), then their share of the break fee is rather small.

How much got back to PGC? - god only knows, as it first would go to Torchlight (GP) 1, who then would, after doubtless keeping a proportion for themselves as set out in the Partnership Agreements with LP's, pro-rata the balance across all the individual partners - the associated Torchlight LP 1 holders, of which we know PGC is a 15m limited partner and (somewhat ludicrously) SCF is a 30m LP. The others remain anon. Torchlight (GP) 1 is owned by TIG. TIG is owned by Perpetual Group, which in turn is owned by PGC. So I imagine PGC should get something as a LP in Torchlight (GP) 1 - 10%, as it was reported the fund closed at 150m - and as the ultimate shareholder up the chain, of Torchlight Security Trustees

This is all public information sourced from the last SCF prospectus, the Receiver's figures, and the Companies Office website, (with the exception of the rumored participation of Fortress and the amount they put up).

Chris Lee clearly believes that facts shouldn't be allowed to get in the way of a good story - each to his own

[Balance]

I try to be subtle but accurate when I quote figures in my posts, especially in the interests of ensuring facts are presented........percy mate, read post number 753, which has a suggested break fee. Scout's honour........


As you say you are going to the meeting, why don't you directly ask the question of PGC 'where in your accounts to the end of Dec 2010 can I find the $20 million break fee Chris Lee says you gouged from SCF', instead of wishfully hoping that Chris Lee knows what he is talking about - he doesn't.

I can't answer your final question, as I don't know, but to put it in perspective with the fabled 20 million (which is really actually 6m) - refer to Receiver's quote - depending on how much of the 100mill Torchlight Security Trustee actually lent to SCF (and as I have said earlier, it is strongly rumoured to be only a small % of the total), then their share of the break fee is rather small.

How much got back to PGC? - god only knows, as it first would go to Torchlight (GP) 1, who then would, after doubtless keeping a proportion for themselves as set out in the Partnership Agreements with LP's, pro-rata the balance across all the individual partners - the associated Torchlight LP 1 holders, of which we know PGC is a 15m limited partner and (somewhat ludicrously) SCF is a 30m LP. The others remain anon. Torchlight (GP) 1 is owned by TIG. TIG is owned by Perpetual Group, which in turn is owned by PGC. So I imagine PGC should get something as a LP in Torchlight (GP) 1 - 10%, as it was reported the fund closed at 150m - and as the ultimate shareholder up the chain, of Torchlight Security Trustees

This is all public information sourced from the last SCF prospectus, the Receiver's figures, and the Companies Office website, (with the exception of the rumored participation of Fortress and the amount they put up).

Chris Lee clearly believes that facts shouldn't be allowed to get in the way of a good story - each to his own

Chris Lee is behaving like a scorned love-sick puppy - he was so full of Hubbard and SCF he cannot now stand the pain of being so wrong. End of story.

Oh yes, he also got a whole heap of other finance companies wrong - Provincial, Hanover, Strategic Finance, St Laurence etc.

[winner69]

A trend reversal in place?

Agree belg ... its all up from here

We will never ever see 30 cents again methinks

its going to cost george heaps to take this baby private

[percy]

Sorry mate, but

so, maybe say a bit more than half was interest and a bit less than half was the break fee, maybe 2.5% is nearer the mark?

I asked George Kerr if there was a 20% break fee.He said if you are refering to the Chris Lee article."I wish it was true".!!!!There was a break fee, but as you pointed out it was included in the $6mil interest.He said yes he did get a pound of flesh,but gave no value to a pound of flesh. Chris Lee was wrong and I was foolish to get my hopes up.

[percy]

The PGC meeting today was a bore.No great projections.This is under consideration.PGW shareholding under consideration,Epic holding underconsideration.
You could say it was "The Great Under Consideration" meeting.No talk of dividends being under consideration.I would think all the PGC shareholders who fronted up with cash for the recapitalization will have their shareholding in PGC and BSH under consideration.

[winner69]

So were the suckers sucked in with the recap then percy

No need to reply .... I understand if the response is still under consideration .... wouldn't want to rush things .... or worse still let everybody knowwhat he knows

Muddied waters are getting clearer by the day

[winner69]

The PGC meeting today was a bore.

You deserve a medal mate .... were the refreshments any good .... or was that under consideration as well

Probably they didn't even want a AGM

[evander]

Thank you for the update Percy

[percy]

You deserve a medal mate .... were the refreshments any good .... or was that under consideration as well

Probably they didn't even want a AGM

Just loved your replys !!!!!! Refreshments OK.Kept off the booze.Used to be good fun.Meetings were held at 4pm on a Friday,with good wine.

[Xerof]

I asked George Kerr if there was .........

cheers percy - at least George didn't perpetuate Chris Lee's fantasy

[MANDRAKE]

Does anybody have any details on the 18 investment properties, valued at 63 mil, previously aquired by RECL and PAL? I wonder how much rental income they will generate for PGC?

[corlemar]

I see NZX are valuing the new PGC at approx $73.4 million....if correct, and you take out the holding of PGW, the value is pretty low....anyone agree, or am i missing something ?

[winner69]

I see NZX are valuing the new PGC at approx $73.4 million....if correct, and you take out the holding of PGW, the value is pretty low....anyone agree, or am i missing something ?

Calculated on the reduced number of shares but using the last sale price of 30 cents

When they start trading again the share price won't be 30 cents ... so wait until then to see what the market cap is

Warning - Don't believe everything you see on the internet ... not even the NZX site

[percy]

Does anybody have any details on the 18 investment properties, valued at 63 mil, previously aquired by RECL and PAL? I wonder how much rental income they will generate for PGC?
Very good question.Whenever this subject has been raised at meetings,the answers have been few and far between.The closest I have ever been to an answer, is from another shareholder, who told me he thought it was coastal developement land.!!!!!!

[corlemar]

Calculated on the reduced number of shares but using the last sale price of 30 cents

When they start trading again the share price won't be 30 cents ... so wait until then to see what the market cap is

Warning - Don't believe everything you see on the internet ... not even the NZX site

Thx W69....it does seem as though the calculation on NZX is 216m shares @ 0.34c per share giving value of $73.4m (albeit they were last trading at $0.30c). Though like you say come next week should be a lot clearer !

[winner69]

DB has 216 mill sahres at 30c giving $64m

As percy would say where have the millions gone ... they can't have just disappeared

[Lizard]

When they start trading again the share price won't be 30 cents ... so wait until then to see what the market cap is


Actually, based on a BSH price prior to PGC halt of 80cps and a PGC price of 30cps, then by my calculation, the market was allowing about 31.9cps effective price for reconstructed PGC shares - i.e. (30-80x0.268)/0.268

Given that some funds may still have to exit PGC as it leaves the index (presumably they may have had to hold on to them until now to acquire the BSH shares as it enters the index?), there could be quite a bit of selling pressure, so the share price could conceivably go lower, despite the asset backing.

[percy]

DB has 216 mill sahres at 30c giving $64m

As percy would say where have the millions gone ... they can't have just disappeared

The 216 mil shares is correct.
It is with a real sense of anticipation, that Percy looks forward to standing at the cliff's edge with his loaded cheque book, at the ready,next week ,to do his community service,by taking those terrible PGC shares off the hands of the hordes of eager sellers.The question is will Percy be on his lonesome?? Will Percy's price make Bernard Wimp look like Father Xmas? Has the fat lady sung? Can Percy sing?or should he just go whistle.!!!Can Percy remember how to write out a cheque.? Do share registry's still accept off cliff transfers.? Will BSH director's quit their holdings,so they are not tainted.?

[winner69]

So the market thinks that PGC is worth less than $50m (plus $36m of PGW shares) ... seems about right for this mish mash of things .... even though Liz and myself split the difference of our calcs and came to $100m but then we weren't factoring in any risk premium to intrinsic value

percy - where have the millions gone .... hope not down gurgler but i see your broker crossed your 60.000 buy this morning. Well done - ahead already

Seems to be a Serepisos connection to one of those loans in the RECL asset .... totally impaired I would imagine though there a rumours that ASB and Marac are talking about doing a deal for each to get somerthing back

[winner69]

Got to love the quality of reporting in the press eh

Quote from stuff under 'Heartland Bank Share Issued' this is a real good one

Based on the 79c share price for BSH, $188m of equity reduction will result at PGC and $48m will be wiped off its profit for the year to June 2011.

http://www.stuff.co.nz/business/industries/5073144/Heartland-bank-shares-issued

Hey maybe, just maybe, it's me that don't get it ... is that where the missing millions have gone?

[bottlerboy]

Just because I'm too lazy - can someone post the consoldation rate and BSH issuance rate so I can figure out how many PGC and BSH I have (sorry for being lazy.)

My understanding is that for every 1000 PGC shares held pre split you will retain 268 PGC and be issued with 268 BSH

[zigzag]

Just because I'm too lazy - can someone post the consoldation rate and BSH issuance rate so I can figure out how many PGC and BSH I have (sorry for being lazy.)

Try Linkmarketservices.com. You won't even have to get off your lazy butt.

[percy]

Got to love the quality of reporting in the press eh

Quote from stuff under 'Heartland Bank Share Issued' this is a real good one

Based on the 79c share price for BSH, $188m of equity reduction will result at PGC and $48m will be wiped off its profit for the year to June 2011.

http://www.stuff.co.nz/business/industries/5073144/Heartland-bank-shares-issued

Hey maybe, just maybe, it's me that don't get it ... is that where the missing millions have gone?

Sorry winner69,but I could not understand any of the announcement.As for the "equity neutral" it left me mentally challenged?.I have not brought any shares today.
I thought there may have been waves of sellers,but we may have to wait until belgarion and others receive their holder statements.

[winner69]

Looks like PGC now own a $25m building in wgtn, after buying out the ASB. The building was once the pride and jewel of Serepisos

Wonder who took the haircut

PGC keeping it in their property portfolio and not intending to sell ... just yet .... hopefully inflation over time will make this a worthwhile transaction

[percy]

Looks like PGC now own a $25m building in wgtn, after buying out the ASB. The building was once the pride and jewel of Serepisos

Wonder who took the haircut

PGC keeping it in their property portfolio and not intending to sell ... just yet .... hopefully inflation over time will make this a worthwhile transaction

A few bald heads at PGC meeting,but I would think it usually whoever sells.
I notice PGC share price moving up,while BSH is not.Where are the waves of PGC sellers.?

[percy]

Most probably got that all wrong [again] .Would depend if ASB were ahead of Marac.If so they could have sold and Marac receive nothing or very little.Marac would then have to pay ASB out so as they may/could recover their interest in the property.1st mortgage 1st,2nd mortgage 2nd,etc.

[climbtree]

The price is really shooting up. Could be all the TA boys now that PGC has an upward trend? Or maybe people selling their BSH shares to buy new ones in PGC. Whatever's happening, it's about time!

[winner69]

Most probably got that all wrong [again] .Would depend if ASB were ahead of Marac.If so they could have sold and Marac receive nothing or very little.Marac would then have to pay ASB out so as they may/could recover their interest in the property.1st mortgage 1st,2nd mortgage 2nd,etc.

I believe ASB were first in line and that Marac (RECL) bought out ASB to assume control (ownership)

But then again Terry said on the radio this morning he still owns the building

[winner69]

Agree belg ... its all up from here

We will never ever see 30 cents again methinks



Seems like I was right a few weeks ago .... nice one

I believe the market has not been 'efficient' at all here .... percy the millions may not have evapoarted into thin air after all

[percy]

Seems like I was right a few weeks ago .... nice one

I believe the market has not been 'efficient' at all here .... percy the millions may not have evapoarted into thin air after all

No may not have.A bit surprised at the weakness in BSH.Down 4cents today,while PGC is up 5cents.As I hold equal number of shares in both companies,does not make a lot of difference.Trying to figure out why BSH is weak.Going into NZX50,and all the talk of "The Bank",people buying PGC just to get "The Bank" shares,yet after the split it is BSH not holding up.I did do some figures on the back of an envelope last week where I thought PGC shares should trade at just over 50cents a share.May be it is because Kiwi Bank said they expected to take a big hit in ChCh as a result of the quake.I thought there would be distressed sellers of PGC at under 30cents.I am certainly getting a lot wrong.However winner69,we knew those millions had not evaporated,and expect they will resurface in PGC in due course.

[ETC]

I’m not sure if this is the reason but the decline in BSH could be related to the downgrade in NZ banks by Moody's.

Moody's criticized New Zealand's heavy reliance on overseas funding and emphasised a need for more retail deposits. It'll be interesting to see if a retail deposit war breaks out between the big banks – tough times for a building society to grow into a bank.

Also PGC is looking more and more like a property management company to me.

[corlemar]

Does anyone have any thoughts or is anyone able to answer whether it's feasible for PGC to enter NZX50 at next review. Given MVN heading south at present, surely all it would need is for PGC to track north another 8/9cents per share which would give market cap higher would it not ? In addition, as Percy mentioned if we're to look at circa 50c per share does this reflect true market cap of PGC. In a post last week, I commented that with PGW shares still held ($36m) PGC looked undervalued at $73.4m just prior to trading halt being lifted.

[percy]

Does anyone have any thoughts or is anyone able to answer whether it's feasible for PGC to enter NZX50 at next review. Given MVN heading south at present, surely all it would need is for PGC to track north another 8/9cents per share which would give market cap higher would it not ? In addition, as Percy mentioned if we're to look at circa 50c per share does this reflect true market cap of PGC. In a post last week, I commented that with PGW shares still held ($36m) PGC looked undervalued at $73.4m just prior to trading halt being lifted.

MVN 66.61mil shares at $1.44 market cap $95.92 PGC 216mil shares at say 45cents market cap $97.2 mil.As you point out MVN is heading south,while PGC is heading north,quickly.NZX 50 here we come!!!!!! thanks for that corlemar,knew BSH was heading into NZX50 ,but did not realise how close PGC was.Have not received my holding statement yet,so we may be counting our chickens before they have hatched.!!! Be interesting to see if the wave of sellers appear then.PGW holding.I have the feeling PGC are trying to maximize the value here.Talk of giving it to shareholders may only be that,talk.I am convinced we will see a deal with PGW/BSH/PGC where BSH ends up with PGWfinance,PGW cancel shares,and PGC end up with more BSH shares.
NB.I have been wrong so often,no one needs to remind me,as Mrs P reminds me often enough.lol.