Krukziener plans some radical changes and new prospectus

Friday 8th June 2001

By Campbell McIlroy

Defaulting Metropolis developer Andrew Krukziener has devised a new plan to pay back the $25.4 million owed to bondholders which is so radically different it will require a new prospectus.

Bondholders will today receive a letter from trustee Tower Trust informing them of the offer.

What the bondholders will not receive is an outline of the proposal which cannot be revealed until a prospectus has been issued.

However, Tower Trust general manager Glenn Clark said the plan was substantially better than the draft proposal put forward two weeks ago.

The letter to bondholders said the trustee informed Mr Krukziener bondholders were not likely to support the draft proposal which would have cut the original interest rate of 14% in half and the penalty rate from 19% to 5%.

Mr Clark said the reason the proposal needed a new prospectus was because it was so fundamentally different from the original terms and conditions of the bond issue that it was effectively a new offer.

So bondholders can gain a clear understanding of where they stand and how long they may have to wait to be repaid Mr Clark has asked Mr Krukziener to state in the prospectus how much is still owed to the ANZ.

The bank is understood to be owed somewhere between $13-$14 million but a few key sales could help significantly reduce this total.

"Mr Krukziener will be doing all he can to ensure bondholders will be paid all that they are owed to the extent the money is available. But in the meantime our position is they are entitled to 14% up until May 21 and 19% thereafter," Mr Clark said. Trustees were often criticised for the amount of money spent to recover funds but he would seek an undertaking from Mr Krukziener that he would meet the cost of issuing the prospectus.

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