Aberdeen LIC locks in gains
Listed investment company, Aberdeen Leaders, has sold a significant portion of its underlying stock holdings in order to lock in unrealised market gains and pre-pay half of a $50 million loan facility with Westpac Bank.
Aberdeen Funds Management managing director and Aberdeen Leaders director Charles Macrae says the local equity market has delivered investors strong returns over the past 18 months and the group wanted to secure those gains.
“The Australian market has had such a great ride and all we’re doing is taking some of these gains by taking about $23 million off the table, which we are able to do in a tax effective manner because we still have historic tax losses that we can use,” Macrae says.
“We’ve decided to pay the more expensive half of the loan as we are internally geared and have a $50 million revolving term loan facility with Westpac,” Macrae adds.
The company retains $25 million of borrowing from Westpac and has entered into an interest rate swap which fixes the rate of interest at 5.645 per cent per annum to maturity, which will be June 30, 2006.
“We have indicated to the market that we are aiming to pay a minimum of 5 cents per share for this year and this trade adds to the healthy year end distributable reserves position,” Aberdeen Leaders chairman Brian Sherman says.
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