Trencor to list Textainer next week


Trencor to list Textainer next week

Published Date: 2019-12-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

Trencor to list Textainer next week

Shareholders will receive shares in the container group as a distribution in specie following its inward listing on the JSE.

The JSE has given the go-ahead for the secondary listing of Textainer's shares on its Main Board next Wednesday. The shipping container group won't raise any new capital through the listing and will maintain its primary listing on the New York Stock Exchange.

Trencor is listing Textainer on the JSE and unbundling its stake to shareholders in order to simplify its interests and unlock value for investors, who will hold Textainer shares directly rather than through Trencor. This will also widen the spread of Textainer's shares, increase its free float and potentially enhance its weighting in stock market indices. As a direct listing, it will raise the company's public profit and general public awareness. Textainer said it considered the JSE a well-regulated and liquid stock market with a sophisticated investor base.

Last year, Trencor deconsolidated the Bermuda-headquartered group from its accounts due to the onerous requirement of converting its US GAAP results into International Financial Reporting Standards, which was a requirement of the JSE. It didn't pay a final dividend last year so it could preserve cash ahead of the inward listing and it didn't not pay an interim dividend for the six months to end-June either.

Textainer has a market capitalisation of about $524 million (R7.69 billion). It has operated since 1979 and is one of the world's biggest lessors of intermodal containers, with about 2.4 million containers in its owned and managed fleet, including standard dry freight, dry freight specials, tank and refrigerated intermodal containers. It leases containers to about 250 customers, including all the world's leading international shipping lines and other lessees, including the US military. It also leases tank containers through its relationship with Trifleet Leasing. The company listed on the NYSE in 2007.

Despite a difficult environment due to muted growth, which had resulted in limited demand for new containers and low prices for new containers, Textainer said shipping volumes and container utilisation remained positive.

The unbundling of its 47.5% stake in Textainer to shareholders will be done by way of a distribution in specie, which means the distribution of a non-cash asset to shareholders, and will be liable for dividends tax. The distribution will take place on 17 December, following next week's listing.

The Reserve Bank has also approved the scenery listing which means trade in its shares on the JSE won't affect investors' foreign portfolio allowances. Its share code will be TXT.

Trencor's shares rose 0.5% to R29 yesterday.

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