Wednesday 2nd February 2011 |
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Investors with about $20 million worth of NZF Group capital notes will not be getting their money back when the investments mature on March 15, the company saying their 9.75% rate is too high above the official cash rate.
Instead they have been provided with an option to renew the capital notes at a lower interest rate for five more years, or else NZF Group will compulsorily redeem the capital notes by issuing new ordinary shares in NZF to the noteholders.
The new interest rate for investors who renew the notes will be 6% a year, compared to 9.75% for the current notes.
Earlier today NZF general manager investments and insurance Dave Shatford said the company wanted only written questions on the matter, but by mid-afternoon no reply had been received to NZPA's email.
Explaining the lower interest rate for the renewed capital notes, NZF said that when the notes were issued the official cash rate (OCR) was 7.25%, meaning the rate set of 9.75% was 2.5% above the OCR.
The rate for the renewed notes had been set at 6% to remain competitive, and recognised the OCR was now 3% and not expected to change to any great degree in the short to medium term.
NZPA
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