Highview sold to consortium

Press, 5 December 1989, Page 50

Highview sold to consortium

PA Hamilton Highview Stud will be sold to a consortium, which includes the company’s present managing director.

At an extraordinary general meeting in the Waikato yesterday, it was voted to sell the Waikato thoroughbred stud’s assets and business to the consortium, which includes the managing director, Brent Gillovic. The shareholders also approved the directors’ recommendation that proceeds of the sale be used to repay creditors after being told it was unlikely there would be anything left to repay convertible note holders, let alone reimburse shareholders.

The purchasing consortium consists of Mr Gillovic, who, with Wellington businessman Ross Fokerd and Melbourne accountant Michael Hibbert, will hold 50 per cent of the new Highview International, Ltd, a private company that remained anonymous in spite of one

shareholder’s asking for its identity.

Mr Gillovic said after the meeting in the Ngahinepouri hall the sale would give the stud a chance to survive by slashing its debt to equity ratio by at least 50 per cent.

“We are hopeful that with improved finances it can have a future,” he said.

The Highview chairman, Dr William Oram, told shareholders the sale, to take place on December 7, according to signed heads .of agreement, would be the end of a dream both directors and shareholders had hoped would come true.

“It is regrettable that, given the advent of major problems in both the financial world and thoroughbred industry, Highview could not last thedistance.ltseemswehad to be a victim of the shakeout. We came closer to going through, however.” Ironically, said Dr

Oram, the thoroughbred industry was now stabilising, but too late for Highview to survive in its present form. Shareholders were told there had been protracted negotiations to sell the stud since July and that the alternative to the present sale was likely to be a board decision to seek to go into receivership.

Costs had been held to a minimum during the negotiations, but there had been substantial interest charges, said Dr Oram. The sale would leave shareholders with a shell company and $23 million in tax losses. The June payment of interest to convertible note holders would be met as part of the payment to creditors, he said.

Asked if the company could not have been sold as a whole, rather than just the assets and the business, Dr Oram said that Highview had “gone to the wall.”