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ANZ extends Veritas' debt for a third time, seeking shareholder approval to sell Mad Butcher

Tuesday 20th February 2018

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ANZ Bank New Zealand has extended Veritas Investment's debt deadline for the third time as the company seeks shareholder approval to sell the Mad Butcher master franchisor business and continue discussions on other asset sales.

The food and beverage investor is operating under the close watch of ANZ, which has effectively been overseeing a wind-down of the business to claw back as much as possible of the $28.5 million it is owed. In October 2017, ANZ extended the $28.5 million in banking facilities until the end of November 2017, and when those came due, the deadline was again pushed out, until Feb. 28. Today, Veritas said that deadline had been further extended until April 27.

Veritas said it is in discussions with external parties on "a number of potential transactions involving the Veritas group; including asset sales, mergers and refinancing. The board remains in active discussions with a number of parties, but all proposals remain incomplete."

The company announced in December that it has agreed to sell its Mad Butcher franchisor business to chief executive Michael Morton for $8 million, less than a quarter of what he sold it to the food and beverage investor in a reverse listing almost five years ago. The deal will leave The Better Bar Co as Veritas' sole operating unit.

Veritas paid $40 million for the franchisor business in 2013, of which Morton received $20 million in cash and $20 million in shares. The company raised $25 million to help fund the deal which had debt financing from ANZ, an underwrite from Craigs Investment Partners and a sub-underwrite from Collins Asset Management.

The board expects to hold a special shareholder meeting to vote on the Mad Butcher franchisor sale in mid-March, and is working to finalise documents for that meeting with NZX Regulation and Simmons Corporate Finance now. It expects to circulate those documents by the end of this month, it said.

In December, the company said it expects net profit from continuing operations of between $3.5 million and $4 million in the 12 months ending June 30, down from $4.2 million in 2017. It expects to generate revenue of $26-to-$29 million in the 2018 year, down from $30.8 million.

The shares dropped 20 percent to 4 cents today, and have fallen 81 percent in the past year. 


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