Blue Star to keep bondholders in the dark after doing their dough
Not only is Blue Star Group selling the business and removing any last hope bondholders have of getting any money back, it now plans to keep them in the dark about business developments.
Wednesday, August 15th 2012, 2:21PM
by Jenny Ruth
Blue Star managing director Phillip Bower says the company will de-list the bonds from NZX on August 28 and makes no bones about the reason.
Blue Star is seeking "to protect the integrity of its current sale process by deferring the preliminary announcement of its consolidated June 30 results and annual report," Bower says. "De-listing removes the NZX reporting requirements."
The NZX reporting requirements aren't particularly onerous: preliminary results have to be disclosed as soon as they are known and no later than 60 days after the company's financial year end - June 30 in Blue Star's case. Its annual report must be published within three months of year end.
Bower doesn't say so but de-listing also removes the company's obligation to report material information as soon as it becomes known under NZX's continuous disclosure provisions.
There's nothing NZX can do to stop Blue Star from delisting the bonds.
"We have no ability under our rules to force a company to remain listed," a spokeswoman said, but added: "The market would take a signal from that (the delisting)."
Bower says the company still remains under the regulatory oversight of the bonds' trustee, Perpetual Trust, the Financial Markets Authority and the Register of Companies.
"Blue Star will continue to report periodically to bondholders and the trustee under applicable laws and the terms of the capital bonds trust deed with the next report under the moratorium regulations due to be sent to bondholders on or before August 31," he says.
After August 28, the bonds can still be traded privately, he says. However, it's a mystery as to why anybody would attribute any value to the bonds: Bowers repeated previous warnings that "the board now considers it unlikely that any value will attach" to those bonds.
Nevertheless, some still see value in them: two parcels of shares traded today, one at 50 cents per $100 face value and the other at 10 cents per $100 face value.
Cold comfort for bondholders, Bower says majority shareholder CHAMP has finally come good on its commitment made in late July last year to convert $14.8 million of debt Blue Star owes it into equity. This commitment was made to induce bondholders to support a restructuring which included slashing the $137.3 million they were owed to a then net present value of $44 million.
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