Friday 25th May 2018
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Veritas Investments director Michael Morton will step down from the board next month, after a meeting where shareholders will vote on whether to agree to a $27.5 million loan from Japanese investment bank Nomura Holdings.
The company announced the possible deal with Nomura, a Tokyo-headquartered financial services group, which in 2011 bought the so-called ‘good bank’ assets of failed lender South Canterbury Finance, at the beginning of the week.
The first two tranches of funding, totalling $22.5 million, will be used to refinance Veritas' debt with ANZ Bank New Zealand with the remaining $5 million tranche set to be "available to fund capital expenditure that is approved by Nomura to provide future growth".
Veritas plans to hold a shareholder meeting in late June, and the company said today that Morton will step down at the conclusion of that meeting "to make way for new directors with appropriate hospitality experience to come onto the board."
Morton, who is the company's largest shareholder, will remain a substantial shareholder and focus on his other private business interests following his resignation, the statement said. Earlier this year, Morton bought the business and assets of the Mad Butcher franchisor, of which he was chief executive, from Veritas 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 earlier.
The board said it is working diligently to find a replacement director or directors before the shareholders’ meeting, and acknowledged Morton's "significant contribution to the Veritas group during his time as a director."
The company's shares, which were in the doldrums due to its financial woes, have surged since the prospective Nomura deal was announced. They last traded at 20 cents, up from 5 cents before the deal was announced, which is the highest they've traded since June 2017.
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