PST – BT

Income distribution forecast tough: PST

PACIFIC Shipping Trust (PST) – which will be taken private by its holding company after unitholders voted in favour of the proposed delisting yesterday – said forecasts on its income distribution could be inaccurate given the current economic uncertainty.

PST was responding to BT queries after the unitholders’ meeting yesterday, during which it also responded to criticisms that the independent financial adviser’s (IFA) report on the delisting did not account for the significant boost to revenue from recent ship acquisitions.

In early October, holding company Pacific International Lines proposed to buy up the remaining 40 per cent of PST that it does not own. The shipping firm offered 43 US cents in cash per unit, a price that the IFA, PricewaterhouseCoopers Corporate Finance, reported to the independent directors as fair.

Stuart Hong, who holds under 2 per cent of PST through his investment firm Unisysco Holdings, wanted to know the impact that the acquisition of nine vessels for charter last year would have on income distribution, he told BT on Tuesday.

On Wednesday, PST responded, saying that an independent valuer had reviewed revenue contributions from newly acquired vessels to arrive at the charter-attached valuations of the new vessels, and these were factored into the IFA’s assessment of PST’s revised net asset value.

When asked yesterday about how the additional revenue would flow through to the income available for distribution, PST said any forecast or projection of future income and distribution of the trust depends on key assumptions. These include counterparty performance, potential charter renewals and rates, the distribution policy and the timing and pricing of any equity fund raising, said PST, adding that the independent directors had made the same point to the 80-odd unitholders at the meeting.

‘Given the uncertainties in the current economic climate and the market, any such assumptions relating to the future performance of the business may not be accurate,’ it said. ‘A forecast based on such assumptions could be potentially misleading to unitholders as to the outlook for PST.’

Asked to comment yesterday, Mr Hong would only say that the meeting was ‘an opportunity to talk face-to-face and address the opposing side’s arguments’.