KEY POINTS:
Terms and conditions have been agreed for the sale by Australian investment company Allco HIT of all the shares in Strategic Finance.
Last month Strategic, whose directors include New Zealand Rugby Union chairman Jock Hobbs, suspended redemptions, affecting 15,000 investors with $325 million of funds.
It has been in talks with a consortium since July to buy out the business with support from the Australian arm of the Halifax Bank of Scotland (HBOS).
On Friday it reported a $15.7 million loss in the year to June 30, compared to a profit of $29.4m a year ago.
Under a sale and purchase agreement, Strategic Finance's parent company Strategic Investment Group is to be bought by Clarence Investments.
Clarence would be 80.01 per cent-owned by the previous owners and existing senior management of Strategic Finance, with the remainder of its shares held by Uberior Ventures Asia, an investment vehicle of BOS International (Australia), Strategic Finance said today.
Uberior would have the option to increase its shareholding to 49.99 per cent to reflect its financial contribution to Clarence.
The transaction was conditional among other things on a capital restructure of Strategic Finance involving new funds being introduced by the consortium and additional funding lines provided by BOS International (Australia).
Secured debenture holders, subordinated debt holders and perpetual preference shareholders would be asked to alter the terms of their investment.
The capital restructure terms were in the process of being finalised and may differ in some ways from indicative terms previously disclosed, Strategic Finance said.
But it remained the intention of the consortium to propose a pro rata conversion of most existing debenture stock into tranches of proposed NZX listed secured bonds, with the balance to remain as debenture stock and repayment of the principal in three equal instalments over a period of no longer than 24 months.
An independent committee of the board of Strategic Finance had been established to consider the terms of the proposed capital restructure.
Under the deal Clarence will pay Allco a purchase price of $25m in cash plus transfer 8 million shares in Allco currently held by various Strategic Finance executives.
Clarence will inject $15m of new funds into Strategic Finance in a form which will be subordinated to Strategic Finance's existing debenture, subordinated notes and perpetual preference shares.
BOS International (Australia) will increase its current debt facilities to Strategic Finance from $100m to $150m.
Strategic Finance is to acquire for $50.2m loans, with a face value of about $67.3m, that it originated and in which Allco co-participated. Of the purchase price, $10m is to be deferred for two years.
Strategic Finance said it was intended that meetings of Allco shareholders and the security holders in Strategic Finance would be held in October, with a targeted completion date for the transaction shortly afterwards provided required approvals were received.
- NZPA
