Curtains for NZF

NZF sells it mortgage group business and closes up shop after failing to find a new auditor.

Wednesday, April 23rd 2014, 6:00AM

NZF Group has sold the last of its assets New Zealand Mortgage Finance Limited to Lawerence Diack for $95,000.

The transaction completes a full circle as NZMF owns the Approved Mortgages business which Diack sold the NZF many years ago.

He says the decision to buy the business happened quite quickly and he is now working on understanding it and future plans.

Under NZF’s ownership NZMF was established to become an aggregation group, however those plans were put on hold several years ago.

Diack says there are a couple of brokers working under NZMF, including Nick McCorkindale

Diack has been focussed on KiwiSaver through his business Saving Kiwis, but now will turn to mortgage broking.

The sale of NZMF came about quickly as NZF’s future plans came unstuck and the directors have now decided to liquidate the company.

It had already sold its half stake in the Mike Pero businesses to Liberty Financial and the sale of its interests in its residential mortgage book to RESIMAC

Following these asset sales NZF was planning to buy an existing business to “preserve value for (NZF) stakeholders and achieve a positive financial outcome.”

As part of this restructure it was planning an early redemption of its capital notes for a combination of the payment of in excess of 90% of the cash reserves held by the company to the noteholders, and the issue of new shares to the noteholders.

NZF says it was ”well advanced” in acquiring “a substantial internationally focused business” which generated revenue of more than $100 million annually.

“The business was also very profitable. The discussions between the company and the stakeholders of this business were well advanced – both parties had satisfactorily undertaken their respective due diligence investigations on each other, and a draft agreement for the sale and purchase of this business had been circulated between the various parties.”

However the deal required the company provide a registered prospectus to its noteholders, however it was unable to find a new auditor after the incumbent firm, RSM Prince, resigned,

“The board has had discussions with a significant number of audit firms. There have been refusals from all but one firm which derives from the legacy issues associated with the company, namely the failure of the company’s finance company operations and the associated litigation and regulatory investigations associated with that failure, and the inability of the company to repay the capital notes in full.”

Because it failed to find an auditor the board plan to liquidate the company.

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