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Veritas in refinancing negotiations as ANZ extends debt for a fourth time

Friday 27th April 2018

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Veritas Investments says it's in negotiations with a new lender and has again been granted a debt extension by ANZ Bank New Zealand.


The food and beverage investor is operating under the close watch of ANZ, which has effectively been overseeing a wind-down of the business to claw back as much as possible of the $27 million it is owed. ANZ has extended the tranches of the company's bank debt, which was due for repayment today, until June 30, Veritas said. This is the fourth time that ANZ has extended the debt since October 2017.


Veritas said this extension has been done to enable its board "to continue its active discussions with a new funder regarding a refinance" of the entire debt. 


"At this stage, while an indicative term sheet has been signed with the new funder, the specific terms and conditions of the refinance proposal remain confidential, incomplete, and subject to certain conditions including finalisation of due diligence and transaction documentation," the company said. "The Veritas board considers that shareholder approval will be required for the refinance transaction, if it proceeds. A further market update will be provided when the details of the refinance are finalised."


When the debt deadline was last extended, in February, Veritas said it was in discussions with external parties on potential transactions including asset sales, mergers and refinancing, but all proposals were incomplete.


In March, the company cut its 2018 guidance after shareholders voted to sell the business and assets of the Mad Butcher franchisor to its chief executive Michael Morton. Revenue is expected to be between $23 million to $24 million, earnings before interest, tax, depreciation and amortisation $4.2 million to $4.6 million, and underlying net profit $1.5 million to $1.7 million.


Veritas has been selling assets to repay debt it took on to buy a series of businesses since embarking on a strategy of building a food and beverage business with the backdoor listing of the Mad Butcher business five years ago. The company paid $40 million for Mad Butcher, half in cash and the rest in scrip, raising $25 million to help fund the deal. It previously said if approved, the Mad Butcher sale proceeds would go to repaying the money owed to ANZ Bank New Zealand and leave the Better Bar Co as its sole remaining asset.


The shares last traded at 3 cents, compared to 31 cents this time a year ago.



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