Covenant Trustee Company has agreed to allow North South Finance Limited (NSFL) to seek moratorium approval from its debenture holders. Discussions were held between the directors and management of NSFL, and the ASB and BOS International to decide what could represent the best possible outcome for NZFL debenture stock holders. ASB and BOS International control about a third of NSFL's debenture stock between them. "We have received advice that indicates that an orderly supervised wind down has potential to produce a better outcome for debenture holders than receivership," said Covenant Managing Director Graham Miller. Covenant placed a requirement on the wind-down option that it must be supervised by Korda Mentha. Here is the full announcement from the NZX:
Graham Miller, Managing Director of Covenant Trustee Company (Covenant), the trustee for North South Finance Limited (NSFL) has confirmed that Covenant has agreed to allow the debenture holders of NSFL to consider an orderly supervised wind down of NSFL. "We have had extensive discussions with the directors and management of NSFL, in conjunction with the ASB and BOS International who between them control approximately a third of the debenture stock. We have received advice that indicates that an orderly supervised wind down has potential to produce a better outcome for debenture holders than receivership, and that it is appropriate for debenture holders to consider this alternative. Key to permitting this option is our requirement that this process be supervised by experienced insolvency specialists Korda Mentha, and that they have powers to review and report to us on any matters that could suggest a breach of the Trust Deed, Securities Act, Companies Act, Financial Reporting Act or Crimes Act. The two independent directors of, Rick Bettle, Chairman, and Vance Arkinstall will remain with all other directors resigning."