Pyne Gould faces loss of $141.1 mln on restructure, Torchlight still profitable
By Paul McBeth
Sept. 9 (BusinessDesk) – Pyne Gould Corp., which put off filing its financial statements because of the Christchurch
earthquakes, faces an annual net loss of $141.1 million on restructuring that carved out its Marac finance unit.
The Christchurch-based company said the loss is made up from a $114.2 million charge and a trading loss of $26.9
million. PGC lifted provisioning for bad debts from the former Marac property loans and incurred costs from stripping
out the finance unit. Still, Torchlight Investment Group, cornerstone shareholder George Kerr’s distressed asset
management unit, made a profit of $3.2 million in the period.
“Making any loss is unacceptable, even if explainable,” chairman Bryan Mogridge said in a statement. “More detail will
be provided next week with the release of the audited financial statements for the year.”
PGC is transforming itself into a wealth management after pushing Marac into a merger with Canterbury and Southern Cross
building societies to form lender Heartland New Zealand Ltd.
Last month, Kerr was supplanted as the company’s biggest shareholder by Californian-based hedge fund, Baker Street
Capital. In 2009, Kerr took a cornerstone stake in a $272.5 million capital raising as PGC struggled with toxic property
loans, ultimately carving them out into special purpose unit managed by Kerr.
More recently, PGC bought a stake in Heartland NZ as one of the underwriters of a $35 million share purchase plan having
already injected $10 million via a private placement. It owns 6% of the merged lender.
In July, the firm took a $14 million stake in a National Australia Bank loan to related fund, Equity Partners
Infrastructure Company No. 1 Ltd. (EPIC). That let the fund dodge a default and will help its orderly wind-down.
The shares were unchanged at 32 cents in trading today, valuing the company at $69.3 million. It said it expects net
tangible assets to be $129 million, or 60 cents a share, as at June 30 when it releases its financial statements.
(BusinessDesk)