Forterra’s Ronan and Barrett are laughing all the way to some extradition-less tax haven
In the latest episode of the Treasury China Trust/Forterra saga, Forterra Trust announced today that it had sold 29.98 percent of the trust, and 100 percent of the management company affiliated with the trust to Hong Kong property developer Nan Fung.
Forterra Trust was formerly known as Treasury China Trust and has appeared in the news initially for its aggressive acquisition of commercial property assets in China, and then for its management’s maneuvering to hive off Treasury China from its bankrupt UK parent, and most recently for its urgent disposal of assets such as the Central Plaza building in Shanghai.
Forterra may have been under pressure to sell due to recent instability in its share price and the ongoing legal battle with Treasury Holdings creditors in the UK.
According to a press release from Forterra, Nan Fung is acquiring the shares in Forterra Trust, and through its wholly owned subsidiary, New Precise Holdings Ltd. The shares were acquired from Forterra directors Richard Barrett, Rory Williams and John Ronan for a reported S$203,439,600 (US$161,114,758).
As part of the purchase agreement, Richard Barrett and Rory Williams also agreed to assign 2,675,000 and 375,000 unit options respectively to New Precise. The exercise period of these unit options expires on June 30, 2015.
A put-and-call option agreement for 7,815,057 option units (equivalent to 3.08 percent of Forterra units in issue was also granted by John Ronan in favour of New Precise. The exercise price is S$2.98 per unit for a total consideration of S$23,288,870. Should the Put/Call Option Agreement be exercised, the completion date of the purchase of the Option Units is scheduled for no earlier than January 2, 2014 and no later than January 31, 2014.
Nan Fung purchased the 100 percent share in Oriental Management Services Limited, (the parent company of Forterra Real Estate Pte Ltd and Treasury Holdings (Shanghai) Property Management Co., Ltd – the property manager to Forterra Trust) from Forterra’s Richard Barrett through another wholly owned subsidiary, Lucky Token Investments Ltd. Total consideration for the Oriental Management acquisition was reported by Forterra to be €17,466,813 (US$22,979,624).
Nan Fung Group (in Chinese: 南豐集團) is one of the largest privately held property developers in Hong Kong and was founded in Hong Kong in 1954 by Ningbo-born businessman, Chen Din Hwa, as a small textile firm. Earlier this month, Nan Fung was honoured by BCI ASIA as a Hong Kong Top Ten Developer 2013.
In addition to Hong Kong, Nan Fung has investments in the People’s Republic of China, Singapore, Malaysia, South Korea, Japan and New Zealand.
According to the statement from Forterra, once the acquisitions are complete, Richard Barrett will cease to have any beneficial ownership of Oriental Management Services, Forterra Real Estate or Treasury Holdings Property Management.
Also, the company jointly owned by Richard Barrett and John Ronan, Treasury Asian Investments Limited has confirmed that its remaining 0.57 percent of Forterra Trust which were not acquired by Nan Fung will be sold on the open market within six months of the completion of the UPA.
Richard Barrett and Rory Williams have agreed to resign from the board of Forterra Real Estate upon completion of the deal and to have their seats filled by appointees from Lucky Token.
If they haven’t picked it up, then they had better soon. Once Barrett and Ronan cash those checks those liquid assets can be hard to track down.