Pacer aims to slash debt

Press, 28 June 1989, Page 34

Pacer aims to slash debt

PA Auckland. Pacer Kerridge told its shareholders yesterday of a $lOO million asset sales programme and of other drastic steps aimed at reducing the troubled group’s debt. Pacer will reduce administration staff by 70 per cent before the end of July, group consultant, Mr Morrie Davis, a former chief executive of Air New Zealand, said. Provided Pacer kept to its asset sales schedule, the group had the support of its bankers, Mr Davis said. The meeting was called to get shareholders’ consent to sell $4O million 'worth of property immediately. This included a complex at 246 Queen Street and rights to the lease on the His Majesty’s Theatre site.

During the next four months another S2OM of property would be sold, including Pakatoa Island, in the Hauraki Gulf. During two years, a total SIOOM would be raised to pay off debt.

Mr Davis did not indicate whether sales agreements had already been signed on the S4OM worth of property being sold immediately. The meeting got off to a stormy start with one shareholder attempting to prevent Phillips Brothers Investments from voting its 25 per cent stake in Pacer Kerridge. That company is owned by Pacer chairman, Mr David Phillips, and his

brother, Steven. One shareholder appeared to catch the directors off guard under section 143 of the Companies Act. This section requires that a company give written authority to any individual to vote on its behalf at a meeting. Mr David Phillips immediately dispatched someone to obtain a copy of that authority and said it would be available before voting started. Shareholders were told that after an extensive study of Pacer, Mr Davis recommended to the board that Pacer: • Reduce its activities in non-cinema businesses; • Dispose of all nonrevenue properties — the non-cinemas — to reduce debt, and that this be done over two years; • Its multiplex cinema complexes to improve cash flow; • Reconstruct its loans with its lenders; ® Reduce staff as a matter of priority; • Resolve all litigation matters.