Sharechat Logo

Veritas Investments gets $27.5 mln refinancing deal with Japan's Nomura

Monday 21st May 2018

Text too small?

Japanese investment bank Nomura Holdings will lend Veritas Investments $27.5 million to repay bank debt and fund expansion in the hospitality sector, if Veritas' shareholders agree.

The food and beverage investor has been operating under the close watch of ANZ Bank New Zealand, which has effectively overseen a wind-down of the business to claw back as much as possible of the $22.5 million it is owed, and has extended the tranches of the company's bank debt four times since October 2017.

In a release to the stock exchange today, Veritas said it has entered into conditional agreements with Pacific Dawn, a wholly-owned subsidiary of Nomura Asia Holding NV, for $27.5 million in credit facilities. Nomura is a Tokyo-headquartered financial services group, which in 2011 bought the so-called ‘good bank’ assets of failed lender South Canterbury Finance.

The first two tranches of funding, totalling $22.5 million, will be used to refinance the ANZ debt in full, with the remaining $5 million tranche set to be "available to fund capital expenditure that is approved by Nomura to provide future growth", Veritas said, adding that the refinancing "allows the Veritas group to focus on a core business area, beverage and hospitality, where it has identified significant growth opportunities and where it has a strong presence already through the Better Bar Company.

"With the support of Nomura through growth funding, Veritas will look to grow revenue, profitability and scale in a very buoyant commercial sector."

Each tranche of debt has a three-year term, with quarterly interest of the bank bill rate plus 6.5 percent per year. Veritas will pay 2.5 percent of the total amount of debt on draw down, and will pay an exit fee of either $2.75 million or 2 percent of the outstanding debt at the time of expiry or repayment, whichever is larger.

Nomura also gets the ability to acquire up to 19.9 percent of Veritas' shares for no consideration in the deal, although that option can't be exercised during the first year and expire three years after it's granted.

Shareholders will need to approve the deal, and the company said further details would be included in a notice of meeting to be sent out in early June before a special meeting later that month.

"We are delighted to have received the support of Nomura so that we can refinance the group," chair Tim Cook said. "Nomura has clearly seen the potential in the sector and are backing the group’s ability to grow. The structure aligns Nomura’s objectives with those of our shareholders – we all want to see profitability and growth."

The company's shares last traded at 5 cents, down from 26 cents this time a year ago.

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report