DIVERSIFIED property developer and investor Stockland has begun to unwind its position in troubled retirement village owner FKP by selling a little under 3 per cent of its 14.3 per cent stake in the group.
Stockland, which has a sizeable retirement business of its own, revealed at its full-year results in August that it would sell down its stake in FKP.
According to a substantial shareholder notice filed by Stockland yesterday, it now holds 11.6 per cent of FKP.
The notice showed Stockland began to sell down its stake in July, with the bulk of its $12 million trade taking place on Tuesday.
It is understood that under Stockland’s subscription agreement with FKP, it is restricted from selling more than 3 per cent of its FKP holding in any one month.
Its sale comes as FKP shares reached their highest level since mid-May. Shares yesterday closed up 6.5 per cent at $1.56. Stockland purchased its holding in FKP in 2008 when shares were trading around $4.
The recent rally in FKP’s shares come despite the company receiving an auditor’s warning in its full-year accounts due to concerns about its ability to refinance debt on parts of its retirement village business.
Stockland’s decision to sell its stake came as FKP touted its intention to become a pure-play retirement fund and would divest its residential and commercial property holdings.
FKP hopes to use the proceeds from its asset sales to repay some of the debt on its retirement arm.
Source: The Australian
