Eastern Hi Fi gains waiver for urgent, pre-Christmas loan

Friday 12th December 2008

Eastern Hi Fi Group, an importer and retailer of audio visual equipment, was granted a waiver from the NZX to raise $3 million via a rights issue to remain solvent and buy stock for the peak Christmas season.

The company's second-largest shareholder, James Urquhart, agreed to immediately advance $1 million of the total sought by way of a loan, which is to convert to shares. Urquhart currently owns 19.8% of the company's stock.

Under the rights issue, shareholders would get two shares for every share held at 15 cents apiece. The issue is subject to a vote by shareholders in January.

In September, the company reported a first-half loss of $569,091 as revenue fell 26% to $5.4 million.

The company incurred one-time costs to reduce the number of unprofitable stores. The stock last traded unchanged at 10 cents on September 26 on the NZAX market.

By Jonathan Underhill

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