Photo / Greg Bowker
Non-staff creditors of REDgroup Retail are owed more than A$170 million ($226.1 million) with the largest amount owed to REDgroup's private equity owners Pacific Equity Partners.
Speaking publicly for the first time in New Zealand since Ferrier Hodgson was appointed voluntary administrators on Thursday, partner Steve Sherman confirmed 75 per cent of the money was owed to PEP.
But he denied the private equity company would have an unfair say in any proposal put to creditors.
"They are like everyone else that is owed money - yes, they do have a major seat at the table and they will keep their options open but let's not lose sight of the fact they are entitled to vote, they have paid money into the group."
Under New Zealand's voluntary administration law, any proposal put to creditors must receive at least 75 per cent approval by monetary value and more than 50 per cent by number of creditors to go ahead.
PEP bought Whitcoulls and Angus & Robertson from British bookseller WH Smith in 2004. It later acquired 32 Borders stores in New Zealand, Australia and Singapore and the businesses were consolidated into REDgroup Retail.
More at NZHerald.
Author, publisher, former broadcaster Gordon Dryden has reacted to the above story as follows:
Re PEP being major creditor (the New Zealand Herald’s story this morning):
So let me get this straight:
1. If Graham Beattie and Gordon Dryden form a limited liability company, and invest some of their savings in that company to run a bookshop—if the bookshop goes under, the company is NOT the first to get its investment back. Apart from Inland Revenue and banks who may have lent the company money would rate among the first creditors, with book publishers owed money next in line. But
2. But if we had good enough financial contacts to borrow all the money needed to buy Angus and Robertson, Whitcoulls, Bennetts and the Borders franchise in Australia and New Zealand—and form a private investment partnership — first charge against our company each month would be a hefty interest bill, to cover the cost of the money we have borrowed.
3. And if, to try and meet that hefty interest bill, we tried to sell our books at 14% above the maximum price charged by other bookstores, and failed financially as a result, than (according to the New Zealand herald this morning)—as part of a receivership or “administration”—our investment partnership would rate as the first creditor, ahead of money owed to publishers for millions of dollars worth of book stock.
Something tells me a financial system that allows this smells like as Aussie con.
No comments:
Post a Comment