Fairview bites the dust
Another part of the Capital + Merchant group has been placed into receivership. This time it is Fairview New Zealand (formerly Cymbis) that has gone under.
Tuesday, May 13th 2008, 1:21PM
Fairview owes $6.9 million to 797 stockholders, receiver Rod Pardington of Deloitte says.
The demise of Capital + Merchant Finance at the end of last year meant that Fairview was unable to meet its interest payment commitments in December.
In December FP Holdings bought the assets of Fairview and assumed the liability to meet the principal and interest payments debenture holders by way of a Debt Assumption Deed.
Pardington says the rationale behind the transaction was to prevent Fairview from being placed into receivership, and to ensure the stockholders did not suffer any loss going forward.
FP Holdings was able to meet the December and March quarterly interest payments to all stockholders and attended to payment of other expenses.
The parent company invested around $1.4 million into the business in an attempt to protect the stockholders of Fairview.
It was FP Holding's intention to realise the acquired assets prior to the maturity dates of the stockholder's debentures in order to repay stockholders in full and on time.
"However, in early May, FP Holdings advised that they had been unable to realise the assets as originally contemplated and as a consequence there were insufficient funds to meet debenture maturities," trustee Louise Edwards says.
Edwards says this failure put Fairview in breach of its trust deed, and FP Holdings in breach of its Debt Assumption Deed.
"With there being no prospect of the breach being remedied in the near future both the trustee and FP Holdings decided that the best measure to protect the interests of all the investors, was to place both Fairview and FP Holdings into receivership," she says.
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