NZF Group liquidation put on hold as noteholder seeks alternatives

Friday 23rd May 2014

NZF Group will put off liquidation proceedings after a major noteholder called for a special meeting to try,to squeeze more value from the failed firm.

The Auckland-based financial services company's board received a formal notice from an investor holding more than 10 percent of the outstanding $18 million in NZF capital notes seeking to put off liquidation until the end of August to look at transactions to boost the value of the business, and hold another meeting in September to make a final decision, NZF said in a statement. Noteholders will also vote on whether to limit NZF's expenses to $50,000 a month until Sept. 30, while granting directors a further $50,000 to look at a transaction to boost NZF's value.

The NZDX-listed notes, paying annual interest of 6 percent, last traded in June last year at a yield of 260 percent. NZF's shares last traded at 1 cent, valuing the firm at $1.1 million.

The firm's board has suspended all action to wind up NZF until the special meeting has been held, and expects to call the meeting within five weeks.

In April, NZF's board decided to liquidate the firm after the resignation of auditor RSM Prince scuttled a deal for a major restructure and was unable to find a replacement.

The extended lifeline means NZF will have to complete and file audited financial statements for the 2014 financial year, and it has hired William Buck Christmas Gouwland to do so.

In November the regulatory arm of stock exchange operator NZX fined NZF Group $35,000 and censured the company after a delay in filing its 2013 annual report, which saw trading in the shares suspended. At the time NZF Group said it was unable to fully value its divestment in its 50 percent stake in MPMH, a holding company for Mike Pero Mortgages, as it no longer had access to the financial statements.

BusinessDesk.co.nz

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