Tuesday 27th February 2018
|Text too small?|
Veritas Investments is investigating a sale or merger of its profitable Better Bar Co as the NZX-listed firm seeks ways to repay lender ANZ Bank New Zealand.
The Auckland-based company has been granted three lifelines by its lender, which is owed almost $27 million as at Dec. 31, as it sells assets to repay that debt. It exited the unprofitable Nosh supermarkets last year and has a conditional agreement to sell the Mad Butcher franchisor to chief executive Michael Morton, with an independent adviser's report set to be mailed out to shareholders once a date for a special meeting has been set.
The $8 million sale price would generate a $5 million accounting gain and go towards repaying ANZ, however it would be less than a quarter of the $40 million price tag attached when Veritas bought the franchisor business in 2013, of which Morton received $20 million in cash and $20 million in shares.
A successful transaction would leave the Better Bar Co as the firm's remaining unit, and Veritas's directors are assessing a number of options "which may include the sale or merger" of the business, recapitalisation or refinancing of its lending arrangements, or a combination of those options, the company's first-half report said.
Net profit fell to $153,000, or 0.35 cents per share, in the six months ended Dec. 31, from $1.2 million, or 2.78 cents, a year earlier, with $750,000 of restructuring costs and $397,000 of losses on its discontinued Mad Butcher operations weighing on the bottom line.
Better Bar Co lifted earnings before interest, tax, depreciation and amortisation 1.9 percent to $3.1 million on an equivalent increase in revenue to $12.2 million.
The shares last traded at 5 cents, valuing the company at $2.2 million.
No comments yet
NZ dollar trades near 2019 low on Aussie rate outlook, China worries
Short window left to lock in good interest rates on term deposits
MediaWorks breakeven stymied by radio
Loan-to-value restrictions effective but have some drawbacks - RBNZ
Yili deal a timely cash injection for Westland farmers - ANZ
AFT interested in medicinal cannabis but says it's not commercially viable yet
Serko chalks up another year of 28% sales growth, profit dips on acquisition adjustment
NZ first-quarter retail sales grow 0.7%, slightly better than expected
SkyCity poised to enter online gaming space
AFT narrows net loss, turns cash flow positive