Eight in ten voters say yes to change: but not enough to save embattled unitholders

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Century Funds Management (Century) is pleased to have stood up for Opus 21 unitholders despite attaining insufficient voting numbers to replace Opus Capital Limited as manager of Opus 21.
 
Subject to a final count, at the meeting of Opus 21 unitholders today, Computershare confirmed that Century Funds Management gained over 80 per cent of total votes cast to unseat Opus Capital Limited as manager of the $240 million Opus 21 property trust but this proved insufficient.
 
This is because only around 40 per cent of the register voted. Fifty per cent of the total unitholding voting yes was required to effect a manager change.
 
Also subject to a final count, Computershare confirmed that Resolution One, which dealt with reduced manager fees and required 75 per cent of those voting to pass, gained over 80 per cent of the total votes cast and was carried.
 
Century stood at the request of the largest group of unitholders and Century chairman John McBain said: “Clearly an overwhelming majority of engaged investors would like to see a new manager however under law the 50 per cent of total unitholders test is an extremely high bar to be met and it is an unfortunate reality that the process fails unless sufficient unitholders express their views.
 
“Having said that, we recognise some investors in the Opus 21 can be forgiven for losing heart in their investment. Century accepts the absolute determination of the voting process and we genuinely wish unitholders our best wishes for the future under the continued management regime.”
 
Century focussed on the poor performance of the trust (74% deterioration in NTA), ASIC’s attempt to remove Opus’ Financial Services licence in August 2010 as well as a total of $35 million in either loans to related Opus trusts or valuation losses pursuant to related party tenants. As a consequence of the unitholder campaign,
 
Opus Capital has been forced to reduce their standard fees to match Century’s management proposal:

  • 50% reduction in asset sale fees
  • Elimination of 2.0% of assets “poison pill” fee

Additionally, Opus Capital was reported as making a commitment  to the investment community through the largest industry research house to halve the $3.0 million acquisition fee proposed in their Opus 21 trust recapitalisation proposal and to waive year one fund management fees in line with the Century proposal. Opus Capital CEO Dean Palmer stated during the meeting that the Opus Capital board will make the reduction in the one off acquisition fee but stated that the research house was in error regarding the waiver of one year’s management fees. Taken together these amendments constitute multi-million dollar fee savings for unitholders.
 
Mr McBain concluded:  “We are very pleased that we stood up for Opus 21 unitholder rights and we are particularly gratified that we have ensured that Opus 21 fee levels have been reduced to market levels on an ongoing basis. Of particular note is the support Century received from major financial advisory groups throughout the country, the advisers we spoke to were very committed to a management change and we are very grateful for their endorsement.”
 
“Century is about to settle a circa $40 million property acquisition in the Brisbane CBD for Century Property Trust 14 – which is already heavily over-subscribed. Additionally, Century has agreed terms on a circa $30 million NSW asset which will form the basis for a further Century property fund.
 
“Century has a very busy asset acquisition programme over the next 12 months and anticipates considerable growth within its $900 million Property Funds Management area.”

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