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Friday 2nd July 2010 |
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Mercer Group, the stainless steel products manufacturer part-owned by Allan Hubbard, has shuffled its debt away from embattled financier South Canterbury Finance and to another related party.
Gresham Finance, a lender associated with Mercer director Humphrey Rolleston, has taken on the manufacturer’s debt to South Canterbury of some $1 million, Mercer chief executive HD Milliner said in a statement today. That’s down from the $1.4 million it owed Hubbard’s South Canterbury as at December 31.
Mercer had previously stopped making payments on its principal to loans from non-bank lenders as it focused on its outstanding debt to Westpac. Last year, the manufacturer breached a banking covenant when its earnings to funding costs ratio fell below the agreed 2.25 times level.
As at December 31, the manufacturer had $11.4 million in borrowings coming due in the next 12 months, including an earlier $1.5 million loan from Gresham Finance in November to pay down its bank debt. The initial Gresham loan is due on November 30 at a rate of 12% per annum, while the South Canterbury loan was due in February at an annual rate of 15%.
The shares, which trade infrequently, were unchanged at 25 cents, and have tumbled 17% this year.
Businesswire.co.nz
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