Pyne Gould Corp throws Epic $14m lifeline

Christchurch-based rural and financial services group Pyne Gould Corp has thrown Equity Partners Infrastructure Co (Epic) a lifeline by proposing to buy $14 million of the struggling investment fund's first ranking loan facilities from National Australia Bank.

PGC has proposed that its participation be made in two tranches, with the first of $7.5 million to be made once the terms of the participation have been agreed and the participation agreement formally documented.

The second tranche of $6.5 million, to be made by July 15, is also subject to PGC obtaining a waiver from the NZX because Epic and Torchlight - an investor in Epic - are related parties of PGC.

Epic, which has about $155 million in assets and 1900 shareholders, is in the process of offloading all four of its UK assets but the value of the NZ dollar is proving to be one of a number of sticking points. PGC said yesterday that if the proposed lending arrangements are not concluded, this may result in Epic being in breach of the NAB facility.

The related party issue arises through, among other things, PGC being the owner of Epic's manager as well as the owner of Torchlight's general partner.

PGC said although the participation has not yet been agreed with NAB, it is expected that this will be agreed within the next seven days.

PGC chairman Bryan Mogridge said its support would help Epic as it moves to reduce debt and complete a restructuring.

Torchlight this year provided Epic with a $12 million bridge facility so it could take part in the recapitalisation of British company Moto. Epic made a $11.2 million loss for the six months to September 30 compared with a loss of $2.9 million in the previous corresponding period.

Shares in PGC closed yesterday at 38c, down 2c.