Chow brothers prepare to buy shares and delist
Millionaire property magnates the Chow brothers are going to delist their property firm, and merge it with their private company.
John and Michael Chow are the dominant owners of Chow Group Ltd (CGL), and made the decision after New Zealand stock exchange operator NZX Ltd announced plans to scrap its junior equity markets the NZAX and the NXT.
The brothers have made an estimated $75 million fortune from brothels, hotels and commercial property deals, and manage an 18-strong property portfolio valued at more than $200 million.
John Chow said it made no sense for the company to move to the NZX, as there were higher costs and new rules. ‘‘We can attract enough private funding without having to trade on a public platform to attract further funding.’’
The funding would come from local and international private equity investors who were being approached, Chow said.
In November 2015, the Chows launched a reverse takeover bid for NZAX-listed cash shell RIS Group.
The brothers see themselves as major players in the property industry, with an aim of managing $1 billion of property by 2020.
Property remains the brothers’ core business, making up 90 per cent of their assets. They also have interests in commercial property and strip clubs.
CGL completed the takeover of RIS Group in February 2016. At that time, the asset value of CGL was about $7.6m.
After the company bought shares in 16 Park Avenue, the owner of residential and accommodation buildings in Auckland, the total assets of the company jumped to $18.66m.
The company’s maiden profit, announced in 2016, topped $8m. At the time, John Chow called it a ‘‘tremendous start’’ for the group.
The NZX made the decision to fold the NZAX and the NXT into its main market in June last year, after they failed to thrive.
The junior equity markets were designed to let smaller companies raise capital and have less rigorous compliance rules than the NZX.
About 90 per cent of the shares in Chow Group are owned by the Chow brothers.