Bankers control Hooker

Press, 26 June 1989, Page 28

Bankers control Hooker

By Jenny Ruth and Tanya Willmer of AAP (through NZPA) Sydney

A task force of bankers has gained effective control of Hooker Corporation after agreeing to a request for a four-month breathing space on its loan repayments. Five major lenders will work with a financial advisor, Mr Richard Grellman, and Hooker to prepare a plan of rationalisation and asset sales within the next two months to reduce the troubled retail and property group’s sAustl.9 billion (SNZ2.S billion) debt.

However, the future of Hooker’s chairman, Mr George Herscu, who did not attend a creditor’s meeting on Friday, is in doubt. Mr Grellman refused to say whether Mr Herscu, who owns 53 per cent of Hooker, is still in control. Mr Grellman also refused to answer questions about Hooker’s requirement for emergency funding, estimated by one banker at about SAustlOOM, to tide it over

short-term liquidity problems. The moratorium agreement was thrashed out after a 5% hour meeting in Sydney between Mr Grellman, the banks, and Hooker. Mr Herscu did not attend.

The talks on Friday followed a preliminary meeting with bankers on Wednesday. “It is a very positive result,” Mr Grellman said after the meeting, adding that more information would be released within two working days.

"We are very pleased with the result. There was unanimity today in the meeting,” he said. Mr Grellman, whose appointment as financial adviser was confirmed as part of the moratorium, said the meeting "displayed the collective desire to achieve financial stability for Hooker. It has been recognised that the company has a portfolio of very saleable assets in the property and retail sectors,” he said. “The directors of Hooker have pledged their total support to the

debt reduction program.” The task force will be chaired by Mr lain Thompson, general manager corporate banking at Westpac, Hooker’s major creditor, with loans of about sAust2ooM. Other members are Commonwealth Bank, the second largest lender with about sAust9oM in loans, the State Bank of New South Wales, the Pittsburgh-based Mellon Bank, and the Mitsubishi Bank. The moratorium is subject to final execution by two American banks, which did not sign on Friday because they “simply have practical difficulties in getting signatures,” Mr Grellman said.

He said he was going to the United States to meet the two banks, and was confident they would agree to the moratorium. Mr Grellman will work with the task force and the company to prepare a rationalisation and asset disposal plan within six to eight weeks for the approval of the majority lenders.