Investors say yes to PFS wind-down

Investors in finance company Propertyfinance Securities (PFS) yesterday voted strongly in favour of giving the company's management another go at winding the company down in a rejigged moratorium rather than receivership.

At a meeting yesterday in Christchurch, 95 per cent of votes cast by debenture investors owed just over $71 million were in favour of the new moratorium plan. The company required at least 75 per cent of votes.

PFS, a subsidiary of listed Property Finance Group, went into receivership in August 2007 but investors agreed to a moratorium in December that year. That moratorium plan ran aground in December last year when the company was unable to meet a $15.5 million repayment in full.

The new deal approved yesterday extends the terms of the previous moratorium by a further two years to five years, cuts the applicable interest rate on debentures and essentially sees investors forgive $12.3 million in interest accrued before March this year.

PFS' trustee Graham Miller of Covenant Trustee Company yesterday told the Business Herald an amendment to the company's trust deed which ends monthly cashflow reporting to him will not compromise his supervision.

Monthly cashflow reporting "is simply no longer relevant in the current context and there are more than adequate alternatives in place to ensure the monitoring will continue in an appropriate form", said Miller.

The company's compliance will be monitored by accountancy firm Grant Thornton, while "financial adviser" Murray Greer will "help to ensure that all loan intervention activities undertaken by the company are conducted in a commercial manner and in accordance with the moratorium rules".