Pyne Gould says Torchlight case not material

Thursday 22nd October 2015

Pyne Gould Corp, the financial service firm controlled by managing director George Kerr, says there is likely to be no or little material impact on its books from the recent High Court ruling over a late debt repayment by its Torchlight Fund.

Earlier this week, Justice Matthew Muir ruled Pyne Gould subsidiary Torchlight Fund No.1 LP didn't have to pay a A$33.6 million late penalty fee on a A$37 million loan from Australian businessman John Grill's Wilaci. Justice Muir rule the fee "so significantly exceeds the loss likely to be caused by the breach that it qualifies as extravagant and therefore unenforceable."

Shortly before the August hearing in the Auckland High Court, Torchlight admitted liability for a A$5 million fee plus interest, and the judge also ordered the Pyne Gould entity to pay $1.18 million in receivers' costs and disbursements, plus additional costs that had been incurred since July 31.

Today, Pyne Gould said the A$5 million fee had already been paid and is not outstanding. The other amounts for interest, fees and costs, which is about $4 million reflected in the judgment, are not materially different to what the company had already provisioned for, is reflected in the Torchlight's accounts, and doesn't change Pyne Gould's carrying value for the investment.

Pyne Gould shares are currently suspended from trading, the second time in as many years, after the diversified investor failed to lodge its annual report with the stock exchange.

Kerr, an NBR 2015 Rich Lister with an estimated wealth of $80 million, was left in control of Pyne Gould in 2012 when he failed to take the company private in a full takeover attempt.

Pyne Gould shares last traded at 24.5 cents, valuing the company at $48 million, and have declined some 36 percent over the past 12 months.

BusinessDesk.co.nz

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