Feltex rescue bid in turmoil over cash

The Feltex rescue was embroiled in confusion last night amid contradictory claims over whether the consortium led by the Turner brothers had put up enough cash to satisfy the carpet-maker's bank, ANZ.

According to a source familiar with the situation, ANZ does not believe it has yet been presented with a fully funded unconditional offer to take the company off its hands.

However, Craig Turner, who with his brother Graeme is leading a rescue consortium made up of some of New Zealand's best-known businessmen, told the Business Herald ANZ had agreed to their funding package last week.

"The offer is fully funded. We had an agreement on the amount that was to be put in and we have a fully funded package for that agreed amount," Turner said.

He said the Bank of New Zealand would take over Feltex's funding lines, but he declined to say how much. He also declined to comment on talk that his consortium's offer required the ANZ to forgive some of its loans.

Feltex last night declined to comment. But its shares closed at 8.9c - well off their $1.70 float price in 2004 - amid growing uncertainty the company can be saved from receivership.

Turner said he was mystified by the delay and shared doubts with other investors that the rescue package would win over ANZ, which is owed more than $135 million.

Would his offer succeed? "I just do not know," Turner said. "The uncertainty over the company's future and its funding is now leading to the gradual demise of Feltex. Should the ANZ agree to our proposal we stand ready to recapitalise Feltex, subject to the [shareholder] vote."

The exact details of the deal remain unclear, but the consortium said BNZ had provided funding, while it would put up $63.5 million.

The group earlier said it would underwrite a renounceable rights issue and that they would also hold warrants over unissued securities with a four-year exercise period.

The company would stay listed on the NZX.

Feltex got caught out by a trading downturn early last year.

Meanwhile, Aussie carpet maker Godfrey Hirst is still hovering over Feltex in the hope that the Turner bid fails to materialise. The carpet-maker - which had proposed buying Feltex's operations for $141.8 million - is said to have held talks with Feltex's bankers as recently as this week.

Sleepyhead bid

* Led by Graeme and Craig Turner, part of the family behind the Sleepyhead bedware group.

* Other members: Cliff Cook, founder of the retirement village operator Metlifecare; Andrew Bagnall, founder of travel company Gullivers Travel, and Graeme Bowkett, founding director and shareholder of rubbish disposal group Waste Management.

* The consortium said it would inject $63.5 million.