Como group in receivership

Press, 27 September 1988, Page 28

Como group in receivership

By

NEVIN TOPP

Como Holdings, the listed West Coast investment company, was yesterday put into receivership at the request of the directors. The Bank of New Zealand holds floating debentures over a number of companies in the Como Group. In a statement to the Stock Exchange yesterday, Como’s chairman, Mr Bruce Smith, said that the directors considered the move was in the best interest of all parties, whether secured creditors, unsecured creditors, or shareholders. Como has a number of companies, including Starline Minerals, which mines coal on the West Coast, Medialink Group, which runs the “West Coast Times,” the giveaway daily newspaper that replaced the “Hokitika Guardian,” and Aden Corporation, which is in timber milling and deer farming. The BNZ has appointed Mr Bruce McAlister and Mr Bruce Irvine, Christchurch partners of Deloitte Haskins and Sells, as receivers and managers for Cosmo Holdings, the listed holding company. They also are receivers for Como Investments, Blackwater Holdings, Starline Minerals, and Medialink Group. The bank also appointed Mr Peter. Steel and Mr Timothy Herrick, Christchurch partners of Price Waterhouse, chartered accountants, as receivers and managers for Aden Corporation, Aden Holdings, and Keep It Dark Enterprises. Mr Bruce Irvine said last evening it was too early to make any decisions on the Comb group of companies. It was too soon to say what would be done. The receivers had no set plan of action. “We are not going to be firing everyone tomorrow. It’s going to take time to find out what is happening.” Because of the natures

of the companies concerned there would be different decisions for each.

The directors had acted in a reasonable manner. They had asked the bank to appoint receivers, he said.

The reason for the split in the receiverships between Deloitte Haskins and Sells and Price Waterhouse was that his firm was accountant for Aden Corporation, and to a lesser extent for Aden Holdings and Keep It Dark, and therefore there was a conflict of interest. The BNZ also held floating debentures over Aden Corporation, Aden Holdings, and Keep It Dark, he said.

Mr Irvine was not prepared to say what amount the BNZ was owed on the floating debentures over the Como group of companies.

Como’s 1987 annual report shows that the company at September 30 had a floating debenture of $4.66 million.

In July, Como announced an unaudited net loss of $16.5 million in the six months ended March 31, with its balance date coming up this Friday,

In the half-yearly announcement Mr Bruce Smith had said that the October sharemarket crash had taken its toll of the company. The com-

pany had written off $3.4M.

Losses on share-related activities taken through the trading account was $3.4M, including write-offs in restructuring activities. At that time, Mr Smith said that Como was attempting to reduce debt by completing restructuring on earlier acquisitions and to improve cash flow.

Como became a listed group when it took over New Zealand Salmon Farms in a reverse takeover in August, 1987. Como was initially set up as an unlisted public investment company by Mr Bruce Smith, and his two brothers, Mr Lindsay Smith and Mr Stephen Smith. The brothers were instrumental in re-listing Sovereign Gold Mines, which was in receivership, in June, 1986, joining the Stock Exchange’s boards as Prime-West Corporation, which went into receivership last week.

In February, 1987, Mr Bruce Smith and Mr Stephen Smith severed their connections with Prime-West, with the intention of concentrating on the West Coast areas of business. Not mentioned in the receivership announcement was Prodigal Gold, a listed West Coast gold miner, in which Como held 51.7 per cent of the shares, and Premier Mining Securities, another listed gold miner, in which Como holds at least 45 per cent of the capital.

Last month shareholders of Premier approved acquiring Keep It Dark Enterprises, a subsidiary of the Napoleon Hill Mining Company, which is part of Como. Keep It Dark was setting up a mining operation at Napoleon Hill, near Ahaura, on the West Coast.

The likely outcome of the receivership is that Como, the self-styled restructurer, will itself be restructured because it contains a number of trading entities. It is a sizeable employer on the West Coast