NZF extends deadline for possible reverse listing

Friday 3rd October 2014

NZF, the listed financial services shell company whose major noteholder blocked a liquidation move by the board earlier this year, has pushed back the deadline for a possible reverse listing with an unidentified business.

The Auckland-based finance company is in talks to restructure its notes and share capital and expected to announce the deal at the end of September, but has extended the deadline to Oct. 17. NZF's board has been looking for a business to use the company's shell as a reverse listing after Nessock Custodians, which held more than 10 percent of NZF's $18 million in capital notes, delayed liquidation to try and find more value in the business at a special meeting in August.

The August meeting also passed resolutions to limit NZF's expenses to $50,000 a month until Sept. 30, while granting directors a further $50,000 to look at a transaction to boost NZF's value, and said it would hold another meeting in September to make a final decision. The board has since cancelled the meeting, as it waits to seal the reverse listing deal.

The board first suggested liquidation in April as its restructuring plans in a bid to return to profitability fell over when its auditor RSM Prince resigned the day after NZF was forced to restate its first-half results for a second time. NZF had planned to seek an early redemption of $18 million owed to capital noteholders in cash and shares as part of a restructure that would have seen it buy a significant enterprise generating annual sales of more than $100 million, it said in a statement at the time.

NZF was rebuffed by all but one audit firm, owing to its failed finance company status and its inability to repay the capital notes in full, resulting in talks with the target business ending, it said.

Last year, NZF was fined $35,000 and suspended from trading on the New Zealand stock exchange after a four-and-a-half month delay in filing its annual report. At the time, NZF said it was unable to fully value its divestment in its 50 percent stake in MPMH, a holding company for Mike Pero Mortgages, as it no longer had access to the financial statements.

The NZDX-listed notes, paying annual interest of 6 percent, last traded in June last year at a yield of 260 percent. NZF's shares last traded at 1 cent, valuing the firm at $1.1 million. NZX regulation suspended the notes and shares from trading in April.

BusinessDesk.co.nz

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