“It provides time for St Laurence to have its loans repaid in an orderly fashion and allows it to undertake activities to preserve and add value to the group's funds management businesses.
“The directors believe it is a better alternative for investors than receivership.”
Podmore says the company aims to repay all its investors in full, however it is unclear how long this will take because of the state of the property market.
“Our goal is to repay our investors 100% of their principal plus pay accrued interest. We are not sure how long that will take us but over the next five years we are aiming to have repaid at least 70% of the debentures and 20% of the capital notes as well as 70% of the interest accrued on debentures.”
St Laurence is proposing that interest due in respect of both debentures and capital notes will be paid up to the date of the vote and then regular quarterly principal repayments of secured debentures and capital notes will commence from April 1. Interest will accrue on the principal amount outstanding of NZ dollar secured debentures and capital notes at a rate of 8% and Australian dollar secured debentures at a rate of 7% for the first 12 months.
Podmore says the plan is better than receivership as if that option was taken debenture holders will receive less than all of their investment and there would also be no cash available for any payments to capital note holders and unsecured creditors.
A key part of the recapitalisation plan is that the company’s major shareholder, Auguste Finance will contribute new equity to St Laurence by transferring property-related assets to the company. Podmore says these assets have a net value of $10 million.
Additionally Podmore and related parties will provide a guarantee to secured debenture holders up to a maximum of $20 million that is available in certain circumstances.
“We believe this support package demonstrates our commitment to the plan, and the extent to which we wish to align our interests to those of our investors,” Podmore says.
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