Receivers' report reveals few escape wreck of Qantas NZ

By DANIEL RIORDAN aviation writer

Unsecured creditors of Tasman Pacific Airlines (which flew as Qantas NZ) may receive as little as four cents in the dollar, based on preliminary figures contained in the receivers' report released yesterday.

The receivers, Michael Stiassny and Grant Graham of Ferrier Hodgson, said the airline's secured and preferred creditors would be paid the full amount owing them - $23.9 million.

But there would be only about $3 million left to pay unsecured creditors owed more than $80 million, they said.

That included businesses that traded with Tasman Pacific and staff owed redundancy payments.

Liquidator Jeff Meltzer of Meltzer Mason Heath said it was too early to tell how much unsecured creditors might receive.

The Bank of New Zealand, Inland Revenue, Customs and Ansett Australia (which leased planes to Tasman Pacific) will be paid in full. And about 1100 staff will receive up to $6000 each in outstanding wages and holiday pay as defined by law.

The BNZ, which appointed the receivers on April 21, would be paid within two months and staff, Inland Revenue and Customs would be paid within three weeks, the receivers said.

The picture for unsecured creditors - including staff owed holiday pay and money in lieu of notice and redundancy - is much grimmer.

The report contains a list of creditors that runs to 74 pages, with about 10 named per page.

Mr Stiassny said the oldest debt appeared to have been incurred in February 2001.

It was unusual in a collapse of this kind for any money to be left to the unsecured creditors, he said.

The receivers had collected $10.9 million of debts owed to the airline and sold more than $2.3 million of assets, with more deals pending.

On April 21, Tasman Pacific had assets with a book value of $55.6 million, they said.

Mr Stiassny said the receivers had negotiated the sale of fixtures and fittings to the major airport companies at Auckland, Christchurch, Dunedin and Invercargill.

Agreement with the Wellington airport company could not be reached so those chattels were removed and auctioned.

The receivers are also negotiating to lease the hangar at Christchurch Airport and intend to sell it.

They had reached agreement whereby Ansett Australia would limit its claims in relation to the leases on the BA146 whisper jets, now being used by Air New Zealand to fly domestically.

The receivers would also receive a major portion of the proceeds from the sale of the one plane owned by Tasman Pacific but mortgaged to Ansett.

Of the unsecured creditors, $9.8 million relates to tickets issued but not used by the date of receivership. The receivers said they understood Qantas Airways had covered a significant portion of this liability by flying passengers or paying refunds.

The report does not include the costs of any legal actions against the company, or contingent liabilities of leases on premises and aircraft.

It said Tasman Pacific had been seeking further equity in the months leading up to the receivership and, in early April, had reached an agreement to sell to Qantas Airways, subject to due diligence.

To secure the position in the interim, Tasman Pacific had sought financial undertakings from Qantas to ensure trading costs would be met during the period spanning the negotiations and due diligence.

Qantas provided those undertakings to the company's satisfaction on April 6, 15 days before it collapsed. But Qantas decided not to go ahead with the purchase after completing due diligence.

The directors then pursued other options, including arrangements with creditors and the injection of more shareholder capital.

When some creditors refused to extend the grace period and directors failed to secure immediate finance, they asked the BNZ to appoint a receiver.

Mr Stiassny said the receivers had asked Qantas for the first portion of funds to settle the undertakings given to Tasman Pacific and would seek further funds as reconciliations were completed.

How long it took the receivers to finish their work would depend on the settlement of asset sales now being negotiated and when other outstanding debts were paid.

The receivers have made facilities available to the liquidators at the company's remaining office in Christchurch and also provided them with the records of the company.

Mr Stiassny said the receivers and liquidators were considering options for dealing with the preferential claims of the 80 employees who worked for a subsidiary company, Tasman Pacific Regional Airlines, which is also in receivership.

The liquidators have called a meeting of creditors for August 14. Tasman Pacific's directors have said they will attend.

The liquidators will complete a report, which will update the receivers' figures to June 8, when Mr Meltzer and Arron Heath were appointed by the company's sole shareholder, Zazu.

Tasman Pacific's five directors are all directors of Zazu.

Tasman Pacific's directors - other than Trevor Farmer and alternate Rob Campbell of Tappenden Holdings - said in a statement yesterday that the $64 million shortfall included losses arising from the closure of the business and the writedown of its assets, "which would not have occurred if the company had continued operating."

They said they had tried to keep the company afloat in the face of rising costs for aviation fuel and a falling Kiwi dollar through a range of initiatives, including capital raising, restructuring and price increases, as well as trying to sell the business to Qantas.

When none of these initiatives came to pass, they put the company into receivership "for the protection of creditors."

Their lawyer, Chris Darlow said fuel costs and the low dollar cost the company between $30 million and $70 million.

Tappenden Holdings issued its own statement, saying it had no comment "on specific issues in the report."

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