Sovereign Reweights Its Investment Portfolio

Sovereign Reweights Its Investment Portfolio

Statement made by Simon Swanson, Managing Director, Sovereign

Sovereign is to sell up to 72,877,000 units in publicly listed Colonial First State Property Trust (CFSPT).

29 million units (representing 20% of the Trust’s units) will be sold to Macquarie Goodman Management Limited at 95.21 cents a unit, equal to the net tangible asset backing value of the Trust’s properties.

The remaining unitholding will be marketed to institutions and habitual investors by Macquarie Equities New Zealand Limited (Macquarie). This offer will be fully underwritten by Macquarie, although Sovereign will have the right to retain a small unitholding in CFSPT.

Sovereign will reinvest the funds raised from the sale across a number of asset classes including New Zealand and global equity funds.

CFSPT is a sound, performing Trust, and we have a positive view of the New Zealand property market. However, we have for some time been considering reducing our weighting in the Trust, as having a majority position is not consistent with our diversified portfolio investment philosophy.

Reweighting our portfolio and reducing the CFSPT holding in an orderly manner, at a good price, and in a way that does not impact adversely on the Trust’s unit value of other investors, is an excellent result for all stakeholders.

The new cornerstone investor, Macquarie Goodman Management, is committed to building a strong property base in New Zealand, thereby enhancing the Trust’s prospects for future growth and wealth creation.

Sovereign is New Zealand's largest life insurance company, its largest home-loan lender outside the five major trading banks, and fifth largest investment company. We meet the financial service needs of over half a million customers. More information on Sovereign can be found at www.sovereign.co.nz

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