Fleur to restructure into investment role

Press, 15 July 1986, Page 28

Fleur to restructure into investment role

PA Wellington The financially troubled flower grower and exporter, Fleur Group, Ltd, is to be restructured into a specialised investment company. The directors of Fleur and its major shareholder, Charter Corporation, Ltd, said that Fleur’s role, following reconstruction and a name change to Leverage Securities, Ltd, would be as a leveraged investor in market leaders in New Zealand and overseas sharemarkets.

“The company will be structured so that investors in market leaders that experience share price growth can actually do better if they switch their investment into Leverage Securities, Ltd,” the company said in a statement.

“The company will invest in only a selected few of the markets’ top performers and these will be disclosed (subject to purchase) so that the fortunes of Leverage Securities, Ltd, will be directly

linked to the growth of these top performers." Leverage Securities’ role was a new concept for the New Zealand sharemarket, the director said.

It would effectively be a managed margin trade for Individual investors, but they would • not be directly exposed to increased personal borrowings.

“The only funds that the investor will have at risk will be those invested in the Leverage Securities, Ltd, shares. “The investor should also benefit, in the short term, from the existing tax losses incurred by Fleur in the last two years.” Fleur has reported a trading loss of nearly $1.49 million in the nine months ended December 31, and a loss of 51.02 M for the previous 12 months. Fleur directors lifted their don’t sell notice on announcing the reconstruction; The statement said

negotiations within the last week had confirmed support for the concept from the financial community. Fleur would make an immediate placement of 1,224,000 ordinary shares at 50c par to acquire certain investment. assets and to strengthen Fleur’s equity base.

The new shares increase Fleur’s issued ordinary capital to 13,464,000 shares. An extraordinary meeting of shareholders would be held in August to sanction the proposed change of direction, a proposed rights issue, the change of name, updated articles of association and the sale of the company’s existing assets.

Following approval by shareholders, a one-for-two rights issue would proceed with the aim of raising about $3.3M.

The issue would be at par with an attached free option for each new share subscribed. The option would entitle the holder to subscribe for an ordinary

share at par at any time until June 30, 1991.

The issue would ’be jointly underwritten by Charter and Rothwells Corporation, Ltd. Rothwells, which had already arranged the share placement, is an association of Rothwells, Ltd — the Australian listed merchant bank.

The funds raised by the rights issue and other funds released by the sale of Fleur’s existing assets would be supplemented by debt finance.

The company’s resources were then to be invested into a limited number of the top performing stocks in New Zealand and overseas sharemarkets. Examples included Industrial Equity, Ltd, Chase Corporation Ltd, FAI Insurances, Ltd, Bell Group, Ltd and Bond Corporation, Ltd.

Charter would manage the Leverage Securities’ portfolio. .