UPDATE: PGC's Torchlight sells down HNZ, PGW stakes 6 Jul 2012
- MARKET CLOSE NZ shares fall; MRP finishes week at $2.53 Business
- RBNZ will explain before using new asset bubble tools Business
- Quadrant sells down Summerset stake at $2.90 a share Business
- Nuplex cuts guidance again as Aust manufacturing splutters Business
- NZ consumer confidence gains in May amid rising house prices Business
- Quadrant selling down 37% stake in Summerset; shares halted Business
- Heartland among eight banks put on notice by S&P Business
- Vodafone NZ counsel Kreider wins bid to keep $541k job Business
- Insights - New Zealand Initiative Business
- Rebound in power prices drives gain in producer prices Business
UPDATE: PGC's Torchlight sells down Heartland, Wrightson stakes amid probe into related party loans
(Updates first three pars to include PGC's confirmation of PGG Wrightson share sale)
By Paul McBeth
July 6 (BusinessDesk) - Pyne Gould Corp's Torchlight Securities today sold down about one-fifth of its stake in would-be bank Heartland New Zealand and almost all of its holding in PGG Wrightson as it faces an investigation by the market regulator over its related party loans.
The Torchlight unit, which holds Pyne Gould's shares in Heartland and PGG Wrightson, sold 7.5 million shares on market for a total consideration of $3.75 million, according to a statement. The sale reduces Torchlight's stake in Heartland to 7.8 percent from 9.8 percent, and follows a sale in May of 9.4 million shares. Heartland's shares rose 2 percent to 50 cents after the sale.
It also sold 40 million shares, or 5.3 percent, in Wrightson on-market at 30 cents apiece for a total consideration of $11.6 million. The shares have since gained 3.3 percent to 31 cents.
The activity comes two days after Pyne Gould lost a judicial bid to keep suppressed the details of an investigation over related-party lending between Torchlight Fund No 1 LP and Perpetual Trust.
The Financial Markets Authority is seeking to recover some $25 million in related party loans made by the Pyne Gould subsidiary as trustee of the Perpetual Cash Management Fund. As at June 23, some $13 million remained outstanding.
Pyne Gould managing director George Kerr requested a financial facility from the Perpetual Cash Management Fund in February, and needed board approval as it breached the fund's investment and credit criteria, according to a June 26 High Court judgment.
An $18 million loan was approved, with security over five properties in Queenstown and Wanaka worth $21.6 million given by Torchlight, and further advances were extended without evidence of similar board sign-off.
Pyne Gould's Perpetual unit disputes the FMA's interpretation, but has asked Torchlight to prepay the facility ahead of the scheduled February 2013 date, which it expects to be completed this month.
The loans were made as Kerr and US hedge fund Baker Street Capital wrapped up a takeover bid for Pyne Gould via Australasian Equity Partners No 1 LP, securing 76 percent of the company in a 37-cents-a-share takeover bid that closed in March.
Kerr became involved in Pyne Gould in 2009, taking a cornerstone stake after the company faced large writedowns on the value of its Marac finance unit's property loan book, which has since been divested.
Since his involvement, Pyne Gould has taken stakes in the Kerr-managed Torchlight funds, which specialise in squeezing value out of distressed assets, and its board approved increasing the capital available to Torchlight to “seek modest investments beyond the Torchlight fund.”
Pyne Gould yesterday dashed reports its was looking to divest its Perpetual Trust unit and shift its primary listing to the ASX, saying a number of options are under consideration, but nothing has been decided on.
The wealth manager's shares sank 6.9 percent to 27 cents, valuing the company at $58.5 million.
17 May 2013 News
New Zealand Government Hon Anne TolleyMinister of Police17 May 2013Labour wrong on Police againPolice Minister Anne Tolley says... more
17 May 2013 Business News
Article - Businesswire Rebound in power prices drives biggest gain in producer prices in almost two years May 17... more
17 May 2013 Business News
Article - BusinessDesk Vodafone NZ’s general counsel Kreider wins bid to keep $541,000 a year job By Paul McBeth May 17 ... more
17 May 2013 Entertainment
Noise PR Heavy Metal Ninjas Join Decortica And New Way Home on North Island Tour Decortica and New Way Home are... more
17 May 2013 Property
New Zealand Government Peseta Sam Lotu-IigaMP for Maungakiekie New bill improves provision of Social... more
16 May 2013 Migration
Steven Joyce says only overseas-based residents who deliberately default on their student loan repayments will be arrested at the... more
16 May 2013 Travel & Tourism
As the All Blacks eye their touring calendar, Dylan Cleaver lists the five best places to watch the team abroad 1: Millennium Stadium,... more
17 May 2013 Rugby
WELLINGTON (AFP) - All Blacks great Dan Carter on Friday backed calls to overhaul global rugby's playing calendar, saying the... more
17 May 2013 Netball
Netball NZ 17 May 2013: Samantha Sinclair (John Paul College / Emerging Talent Accelerant Squad) and Jamie-Lee Price (Mount... more
17 May 2013 Column
Gordon Campbell on the 2013 Budget by Gordon Campbell The Budget lockup retains a symbolic value these days, but little... more
15 May 2013 Column
Gordon Campbell on stonewalling about the GCSB, and MMP by Gordon Campbell This week has seen two examples of turkeys... more
3 May 2013 People
Tauranga teen Kristina Webb knew her artwork was getting popular, but she had no idea of the extent of that popularity until she saw... more
15 May 2013 Recruitment
New Zealand Government Hon Chester BorrowsAssociate Minister for Social Development Associate Social Development... more
10 May 2013 Recruitment
New Zealand Government Budget 2013 has provided more funding towards the highly successful Maori Affairs cadetship programme, which... more