Monday 26th February 2018
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NZX-listed CBL Corp has appointed voluntary administrators to "preserve value" after the Reserve Bank won a court order to place subsidiary CBL Insurance in interim liquidation on Friday.
KordaMentha's Brendon Gibson and Neale Jackson have been appointed voluntary administrators of CBL Corp and a raft of subsidiaries, following Friday's order to appoint interim liquidators to subsidiary CBL Insurance at the request of its prudential supervisor.
CBL said its directors considered the appointments "necessary to preserve value in the interest of all stakeholders" following a High Court hearing on Friday where Justice Patricia Courtney ordered McGrathNicol’s Kare Johnstone and Andrew Grenfell be appointed interim liquidators of CBL Insurance on an application by the Reserve Bank.
"We are working closely with CBL’s management and its directors to execute strategies that preserve the CBL group’s various operating units," KordaMentha's Gibson said in a statement.
The KordaMentha appointment only relates to the New Zealand domiciled entities, and "allows the group to continue trading through a formal process at the parent-company level, to determine the best way forward for all stakeholders."
The court order empowers the liquidators to "maintain the assets of the defendant company”, including the ability to take custody and control of assets, seek freezing orders, and take control of all global assets irrespective of which country they’re located in. The order also means legal proceedings can't be brought against the defendant company or enforce a right over property of the entity without the liquidators' approval.
CBL Insurance is a subsidiary of NZX-listed credit surety and financial insurance risk firm CBL Corp. The Reserve Bank has been reviewing the New Zealand insurer to assess the adequacy of its reserving for a French construction business, and set the CBL unit’s minimum solvency at 170 percent and required it to consult on any non-business as usual transactions of more than $5 million.
Those issues have also attracted attention from the Central Bank of Ireland, where CBL Insurance Europe DAC is domiciled, with the Irish regulator instructing the insurer to stop writing new business immediately.
Earlier this month CBL Corp said it was hiring advisers to sell the French construction insurance division and had triggered legal rights against the vendors who sold the Kiwi company the unit.
CBL’s stock has been suspended from trading on the NZX as the stock market operator tries to work out whether it’s kept the market informed of material information and met continuous disclosure obligations, which has also attracted engagement from the Financial Markets Authority. The shares last traded at $3.17 before being suspended, more than twice the $1.55 price the shares were sold at in an initial public offering in late 2015.
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