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DNZ float scuppered

DNZ has given into strong criticism and decided to can its $140 million initial public offering - for now.

Thursday, December 3rd 2009, 10:38PM 10 Comments

The company announced last night that it has deferred the sharemarket float until next year

It says the debate in the media over the IPO "has resulted in confusion and concern amongst some of our shareholders."

A key point of contention is DNZ plans to use $43 million of the float proceeds to buy the management contract from chief executive Paul Duffy and former chairman Alastair Hasell.

The board say "it has a duty to take time to clarify matters for shareholders and correct any misconceptions.  It is not appropriate to continue to debate the merits of these transactions in the media.  It is damaging to the Company and to its future prospects.  It also has the potential to undermine the relationship between the board and the shareholders."

While the IPO has been postponed the board say, in a statement, that they "unanimously support the proposed capital raising and listing and firmly believe this is in the best interests of the company and its shareholders."

While groups like MMG and individual shareholders have been vocal in their opposition to the structure of the IPO the board claims it has "received overwhelming positive support from the...capital market."

DNZ says the postponement will give stakeholders "time to properly reflect on the board composition and the current proposal."

It intends to explain other possible options and why they believe they are inappropriate for the long term future of the company.

"In the interim we will continue to manage the challenges the company faces in today's difficult environment and will re-establish the unlisted trading market which last traded the Company's shares at $0.40 (or post consolidation $1.00)."

All applications monies received to date will be refunded.

« MMG could scupper $140m DNZ floatSovereign takes regulation bull by the horns »

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Comments from our readers

On 4 December 2009 at 8:27 am Hony said:
the board claims it has "received overwhelming positive support from the...capital market."


Sure buying a share for $0.82 with the real value of$2.10 is positive for new buyers , not so for current shareholders, and the paying $43Mill to these greedy directors , disgusting they should be sacked
On 4 December 2009 at 9:19 am disgruntled said:
Paul Duffy lulled all investors into a false sense of security with his smooth talking about 'prerserving investor capital' and 'increased distributions' at his annual road shows, only to turn around and kick them in the shins. What a disgrace
On 4 December 2009 at 10:25 am Mixer said:
These guys are no different to the finance company directors that have systematically ripped off investors over the past 3 years. They are simply first class crooks
On 4 December 2009 at 12:22 pm Lyn Graham said:
I agree wit the above. My retirement funds have been hiot hard enough. I trusted Paul Duffy. I believe the 40 or million dollars pay out should be reinvested into the companies recovery. I no longer know who to trust with what is left of my funds.Alo no consultation with existing sharedolders was a very bad move.
On 4 December 2009 at 2:28 pm Billy the Hawk said:
If the management contract is worth $43million then why are our share/unit values being slashed to this extent. The perpetrators are ripoff artists supreme and a further example of the behaviour seen all to often in the finance industry
On 4 December 2009 at 3:40 pm golfa said:
Hasell is truly a right "hassle", and Duffy is a "duddy". Two conniving crooks that should be in jail. Be very wary of their next actions over the Xmas break while you are all on holiday. They are just absolutely bad apples and will be planning some devious way to rip you off even more. They have no concern for you at all, they're just bloody greedy and should be prosecuted. Good example of why not to believe all the rhetoric from such charlatans & rip-off merchants.
On 4 December 2009 at 5:39 pm MMG said:
MMG's Response

MMG commends DNZ’s decision to withdraw their IPO proposal. We agree with their view that there is a need to engage further with DNZ shareholders and stakeholders. MMG is currently in active and constructive dialogue with them in this regard. MMG will continue working towards achieving quality outcomes for our clients who are existing DNZ investors.

MMG will issue further statements once these discussions with DNZ are progressed.

(This is a statement issued by MMG Marketing and Communications Manager Shaun Anastasi)


On 5 December 2009 at 9:13 am Graham & Trish Clark said:
My holdings cut to under half in volume and value, no say in any decisions, less dividends in future, my loss ,directors gain...disappointing and unacceptable.
On 8 December 2009 at 9:06 am Stephen said:
What the public are not aware of in this saga is the real reason that MMG (for those unaware it is really NZ Funds) have pursued this action is that they want the funds to flow into a NZ Funds Property fund. NZ Funds will look like the good guys but beware wolves in sheeps clothing.
On 9 December 2009 at 11:47 am Richard James said:
Stephen
It is true that NZ Funds, as MMG's primary investment partner, has assisted them in resisting DNZ's capital proposals. However your logic comes unstuck at that point. If we wanted the money to flow to NZ Funds we would have supported the listing - as it would have provided investors the ability to realise their holdings. We believe that the terms of the proposed transactions would be detrimental to existing shareholders and unfairly favour the manager of DNZ. Trying to address that imbalance is all we are doing.
An overwhelming majority of existing DNZ investors have now signed resolutions supporting our efforts to bring about governance changes at DNZ.
They are very aware of who is working on their behalf (and who is not).

Richard (NZ Funds CEO/MMG Director)
Commenting is closed

 

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