Johannesburg - Trencor [JSE:TRE]
said on Friday shareholder value should improve as a result of the underwritten public offering of 7.5 million shares in New York-listed Textainer Group Holdings‚ in which it has a 60.01% beneficiary interest via Halco Holdings Inc.
Textainer‚ the world’s largest lessor of marine containers‚ has offered 5 million new Textainer common shares and Halco Holdings Inc has offered‚ from its existing shareholding in Textainer‚ 2.5 million Textainer common shares.
All the shares are offered at a price of $31.50 each. Trencor is a discretionary beneficiary of the Halco Trust‚ the sole shareholder of Halco Holdings.
Halco and Trencor said they believe that the transaction is in the best interests of Textainer‚ Halco and Trencor shareholders.
Trencor has obtained the support of three shareholders together holding 55.81% of the Trencor shares in issue‚ to dilute its beneficiary interest in Textainer‚ its major asset‚ to below 50%‚ but not below 45%.
Halco and Trencor said the transaction was another step in a series of transactions implemented by Trencor over a long period to restructure the Trencor group with the ultimate objective of maximising shareholder value.
It provided Textainer with capital required for capital expenditures and general corporate purposes. It facilitated increased liquidity in the Textainer share on the New York Stock Exchange due to the enlarged “free float”‚ and thus should improve shareholder value.
It also enhanced the efficacy of the existing Trencor group structure from a corporate governance and regulatory perspective.
Notwithstanding the transaction‚ Trencor said it was fully confident of the future potential of Textainer and remained a strategic and committed beneficiary shareholder in Textainer.
Trencor said that as a result of the transaction‚ its existing 60.01% beneficiary interest in Textainer would dilute to 49.94%‚ before taking into account the option‚ which Textainer has granted to the underwriters and which is exercisable for 30 days‚ to purchase up to an additional 1.125 million Textainer common shares. Should this option be exercised‚ Trencor’s beneficiary interest would dilute to 48.93%.
Although the transaction results in Trencor no longer having a 50%+1 beneficiary interest in its major asset as required by the JSE listings requirements‚ Trencor said it had received dispensation from the JSE to retain its main board listing on the JSE. This was subject to complying with certain JSE requirements‚ mainly securing support for the transaction from two to three of the largest Trencor shareholders.
Trencor said the unaudited pro forma financial effects of the transaction were a 5.7 % increase in its net asset value per share from 2 887.2 cents to 3 052.2 cents and a 14.8% dilution in adjusted headline earnings per share from 256.7 cents to 218.6 cents.
*Follow Fin24 on Twitter