Waltus answers critic

Waltus is fighting back against opposition to it merging a further nine syndicates and their 16 properties into Urbus Properties at a total nominal cost of $157 million.

Whangarei accountant Brian Moyle, who led a group of dissenters opposing the 2000 merger of 27 Waltus syndicates but failed to stop it, is opposing the latest merger plans and has written to the relevant investors.

Warwick Hawes, chairman of the Waltus syndicate companies board, has also written to the syndicate investors urging that they vote for the merger.

"I feel it important that we correct a number of assertions made by Moyle and place Moyle's letter in an appropriate context," Hawes says.

The decision to recommend the merger was taken by three directors independent of Waltus, he says.

"In today's changing economic and financial climate the syndicate structure is falling short of meeting investor's requirements. Distributions are not assured and are difficult to predict due to ever increasing banking requirements to reduce debt and increasing tenant and property maintenance costs," he says.

"We know that most syndicate investors place a high level of importance on receiving a consistent and predictable level of distributions - investors becoming convertible note holders in Urbus will permit this to occur."

Moyle is particularly incensed that Waltus is including the Albany Power Centre in the merger proposal.

Hawes says particular attention was paid to the Albany investors. While Waltus is entitled to about $1.3 million on the sale of Albany, it has agreed to waive this fee if Albany is merged with Urbus.

At the current valuation, that increases the value per 5,000 units from $7,450 to $7,959, Hawes says.

Also taken into account was the proposed Westfield shopping centre proposed for a 21 hectare site next to the Albany centre. "There seems a reasonably material (and increasing) risk that tenants such as Farmers, Michael Hill and Hallensteins may move to the new proposed Westfield centre," Hawes says.

The Albany board also considered the possibility of strata titling the complex which would cost an estimated $1.5 million to $1.7 million. Valuer CB Richard Ellis doesn't believe a materially higher value would result, Hawes says.