Twenty years to the day after the sharemarket crash that led to the collapse of his Equiticorp, Allan Hawkins' Cynotech Holdings announced a major capital raising and plans to step up to the main NZX board.
Hawkins, who was sentenced to six years' jail for fraud in 1992following Equiticorp's collapse, said he was unaware of the significance of the date until moments before yesterday's announcement.
"It's very strange, isn't it. There is an irony - not contrived," said Hawkins, who controls 24 per cent of the NZAX-listed finance company.
"We only realised just before we put the release out. We went onto the internet just to have a look at things and bugger me, the top story there was that it was the anniversary. I don't know what to think," he laughed.
In another irony, Cynotech plans to take advantage of the wave of finance companies collapsing or in trouble as a result of the credit crisis.
Hawkins said the capital raising was to allow Cynotech to mine opportunities in the finance sector.
"We have been very fortunate by not being impacted at all by what's happened in the finance sector simply because we don't have public borrowings and we don't have a prospectus."
Last year Cynotech bought the loan book of National Finance, which collapsed owing $25 million. Cynotech paid $7.7 million to buy the $23 million loan book and it had already recovered around half the $23 million.
Ten finance companies have collapsed in the last 18 months, and another, Geneva Finance, suspended debt payments this week.
In the first phase, Cynotech plans to raise $3.3 million, with over-subscriptions possibly taking that up to $6 million, via a convertible preference share issue on a one-for-five basis at 20c each.
The convertible prefs will be separately listed and have a yield of 12.375 per cent with dividends paid monthly or quarterly. Shareholders can opt to convert at any time during the next three years.
Additionally, the company will ask shareholders for approval to issue up to $60 million from 300 million perpetual preference shares at 20c each.
