SEA Holdings is planning a restructure in which Tasman Properties will take over a subsidiary of Sea Holdings to create an Australasian property firm with a NZ$1 billion (about HK$5.08 billion) portfolio. Sea Holdings indirectly controls 35 per cent of New Zealand-listed Tasman, a highly geared company that lost NZ$20.183 million in the year to March. SEABIL (NZ) Holdings (SNZH), a wholly owned subsidiary of Sea Holdings, owns 60 per cent of New Zealand-listed SEABIL (NZ), which in turn holds 40 per cent of Godden Investments, a shelf company. SNZH controls the remaining 60 per cent of Godden Investments, which holds 35 per cent of Tasman. Under the plan, Tasman would merge with SEABIL and Godden, taking over their rights and liabilities, and a change of name to Trans Tasman Properties, Sea Holdings secretary Lam Yeung-tak said. The liabilities include convertible notes issued by SEABIL, which had a book value of NZ$228.9 million at the end of 1994, he said. Mr Lam said studies by the management of Tasman, SEABIL (NZ) concluded that the property portfolio of SEABIL (NZ) would generate stable earnings from long-term leases. Many of its properties had been let at rents above the market average, limiting growth prospects. Mr Lam said Tasman's property portfolio offered potential for growth in an improving market, but Tasman's high gearing exposed it to a fall in the property market or a rise in interest rates. In the amalgamation, the convertible notes would be convertible into Tasman shares on maturity, and Tasman's existing shares would be consolidated on the basis of 28.67 Tasman shares for one new share. Mr Lam said each fully-paid SEABIL share would be converted into a fully paid consolidated Tasman share, and each fully paid Godden Investments share would be converted into 1.3562 consolidated Tasman shares. SEABIL's shares in Godden and Godden's shares in Tasman would be cancelled, Mr Lam said. He said SEA Holdings would end up with about 44 per cent of Tasman, rising to 46.4 per cent on conversion of all the convertible notes, based on an 80 per cent acceptance by SEABIL's public shareholders. Because of Tasman and SEABIL's differing dividend policies, Tasman's dividends might temporarily rise, while SEABIL's might fall, Mr Lam said. He said SNZH had agreed to grant SEABIL shareholders except SNZH an option to swap SEABIL shares for convertible notes, which paid a fixed nine per cent, and 'as such provide some downside protection against uncertainties in dividend payments'.