GPG noteholders need to be looked after: Hawkins

Wednesday 1st September 2010 1 Comment

Any restructuring of Guinness Peat Group must take adequate account of the position of the company's capital noteholders, says John Hawkins, chairman of the New Zealand Shareholders' Association.

GPG has two issues of capital notes outstanding, $350 million which mature in November 2012 which at February 28 were owned by 7,610 investors, and $76.9 million which mature in December 2013, which were owned by 2,620 investors.

Hawkins says when GPG's Australia-based director Gary Weiss was in New Zealand earlier this year promoting his now defunct proposal to split off GPG's Australian assets into a separate company, he asked Weiss what would happen to the capital notes.

"He said, that's a detail. We haven't worked through those sort of details yet," Hawkins says.

"That got me pretty concerned, given the quantum of $420 million-plus notes. It's more than a mere detail in my opinion."

Hawkins says by his calculations, if the Australian proposal had proceeded, the extent of the remaining assets would have meant GPG would have "just scraped by" the covenants of the notes' trust deed.

In other words, the buffer between the money owed the noteholders and GPG's assets would have been much slimmer than currently.

Hawkins says he has written to the notes' trustee, the New Zealand Guardian Trust Company, outlining his concerns.

Comments from our readers

On 2 September 2010 at 12:08 pm Rob of the North said:

This is a very good point that John is making...i'm a 100K bondholder and i object to the cavalier way GPG are treating us all..hold them to account, i say...don't want another SCF debacle on our hands..go hard, John Hawkins and take no prisiners!!