DFC denial on Mt Hutt

Press, 13 December 1986, Page 36

DFC denial on Mt Hutt

The Development Finance Corporation (DFC) had not endorsed the Leisureland Corporation, Ltd, proposals to take a controlling interest in the Mount Hutt skifield company, said the South Island regional manager of DFC Ventures, Mr David Steele, yesterday. Mr Steele was responding to a statement made by the chairman of Leisureland, Mr John St Clair Brown, at a meeting of Mount Hutt Ski and Alpine Tourist Company, Ltd shareholders in Christchurch on Thursday evening, in which he said that the DFC had endorsed Leisureland’s proposals.

If endorsed meant that the DFC approved or supported the Leisureiand proposals then that is not the case, Mr Steele said. “We will not be declaring our position before the extraordinary meeting of Mount Hutt shareholders is held on December 18.” At Thursday evening’s meeting, some shareholders sought further financial information from Leisureland, such as the company’s latest annual report.

Mr Brown said that he was unable to supply the reports as the company had had difficulty in supplying sufficient numbers for its own shareholders, and there were only a few left. In reply to another question about “the take-over of Mount Hutt,” Mr Brown said that the Leisureland proposal was not a take-over, but a chance to inject badly needed capital into a company to keep it going.

The company would be keeping its offer of 150 c a share cash open, as had been required by the Mount Hutt directors, but he said that personally he did not want to buy shares from shareholders because he wanted as many shareholders as possible in the company.

Leisureland did not want to takeover all the shares. It preferred to buy the proposed increased capital at the 100 c premium a share as a means of providing finance for Mount Hutt’s development.

It was also possible that Leisureland could reduce its interest below 50 per cent at a later date so that more shareholders could be included in the company, Mr Brown said.

The Leisureland proposals are:

© Mount Hutt issue new ordinary 100 c shares at a 100 c premium to Leisureland sufficient to give it 51 per cent of all issued capital, which would give the skifield company $2.2M in funds.

© If called on Leisureland will offer to buy existing ordinary shares at 150 c and preference shares at 165 c, such an offer remaining open until September 30,1987.

0 The clause restricting the votes of any shareholder to the maximum of 1000, which is in the company’s articles, be removed.

© That the articles be altered to allow Leisureland to appoint three directors and to appoint the chairman.

The proposals require 76 per cent approval from shareholders (including proxy votes) present at the meeting in Methven, under the company’s articles of association.