CHH reduces borrowings

Press, 24 July 1986, Page 30

CHH reduces borrowings

PA Auckland Carter Holt Harvey, Ltd, has already paid back a lot of the $405 million borrowed to acquire Alex Harvey Industries, Ltd, according to executive chairman, Mr Richard Carter, in the annual report In his review, Mr Carter says during the year, to March 31, the borrowings had been reduced by instalments received from the September, 1985, share placement and cash issue, or had been converted to New Zealand currency by loan swap agreements. At March 31, borrowings relating to the purchase had been reduced to the equivalent of $l5O million in foreign currencies and $69 million in New Zealand currency. The consolidated balance sheet as at March 31 shows term liabilities at $358,245,000, up from $191,595,000. A note to the accounts shows $351,480,000 of that amount is in term loans. Of that, $329,223,000 is repayable beyond one and up to five years at an average interest rate of 10.8 per cent. A further

$21,331,000 is repayable beyond five and up to 10 years at an average interest rate of 12 per cent The note to the accounts also says directors anticipate that $200,975,000 included in the term loans figure, or part therof, will be converted to equity-linked funding by July 31. As previously reported, consolidated tax-paid trading profit for the March year was $73,418,000. A change in accounting policy of not taking the gains or losses on conversion Qf overseas subsidiaries assets and liabilities to consolidated statement of profit, increased the profit in the year under review by $3,753,000. The change in accounting policy of capitalising some goodwill and writing it off over periods of up to 20 years had no effect on profit.

As a result of that change, the balance sheet includes intangible assets, goodwill of $273 million relative to the AHI acquisition, which is being amortised over 20 years. The balance sheet shows total shareholders’ funds at $554,682,000.