Posted on: Wednesday, October 6, 2004
Campbell Estate secures financing
By Deborah Adamson
Advertiser Staff Writer
The James Campbell Estate said yesterday that it has secured $645 million in financing, putting in place a critical piece of its plan to become a closely held real-estate operating company after a century as a private trust.
"This is a significant milestone in the estate's history," said Steve MacMillan, the estate's chief executive. "These are the funds that we'll need for the next 10 years."
Almost half of the money will be used by the new company, called James Campbell Company LLC, to refinance debt and the rest will go toward paying trust termination expenses and for working capital and other needs.
The financing was made through private placement, or private investments that aren't offered to the public, the company said. Entities such as insurance companies and pension funds are the main sources of the money, MacMillan said.
The Campbell Estate will cease as a private trust in 2007, 20 years after the death of James Campbell's last surviving daughter. The date was stipulated in his will.
Campbell, a Scottish carpenter who built a business empire in Hawai'i and died in 1900, had to choose a termination date because private trusts generally are not allowed by law to exist indefinitely.
Last year, probate court approved a transition plan for the Campbell Estate to become a real-estate operating firm. Nearly all of its 31 heirs have opted to become shareholders of the new company, MacMillan said, taking ownership in cash and stock.
The new company will be led by an executive team and a board of directors. The estate's beneficiaries will begin selecting directors in 2006. But beyond its corporate structure, there won't be major changes. The firm will continue to invest in, develop and lease real estate.
"The change in business is not so dramatic," MacMillan said.
Campbell Estate, Hawai'i's second richest trust, has assets of more than $2 billion. About 60 percent of its holdings are outside Hawai'i. It owns 59 office, retail and industrial properties in 17 states and the District of Columbia.
The estate's largest project is the city of Kapolei on O'ahu.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
