Banking & finance briefs: Capital + Merchant five remanded, Kiwibank eyes cash
1. Capital + Merchant five remanded - Five Capital + Merchant directors have been remanded until August 4 after appearing in the Auckland District Court to face criminal charges laid by the Securities Commission. Fairfax's Stuff reports of the five directors of the failed finance company - Neal Nicholls, Owen Tallentire, Colin Ryan, Robert Sutherland and Wayne Douglas – only Nicholls and Douglas appeared in court.
Four of the directors, Nicholls, Ryan, Sutherland and Douglas, have an application to dismiss the criminal charges due to be heard on August 4. They're charged with making "untrue statements" in the company’s registered prospectus and investment statement in August 2006.
2. Dorchester's big shareholders to cough up - Major investors Hugh Green and 42 Below founder Geoff Ross' investment company the Business Bakery appear set to stump up the lion's share of the cash needed for Dorchester Pacific to get a proposed capital reconstruction plan for its finance company subsidiary up and running. Dorchester Pacific executive director Paul Byrnes told the NZ Herald raising NZ$8 million to NZ$10 million through a rights issue would depend on the support of the two major shareholders.
"They have indicated support to formally underwrite the rights issue. Without that in today's market, it would be a challenge," he said yesterday.
Hugh Green Investments and The Business Bakery each own a 20 per cent stake in Dorchester Pacific.
Byrnes said he hoped around 80 per cent of the new capital would come from the major shareholders.
3. NZ Post seeks cash for Kiwibank - Prime Minister John Key confirmed Kiwibank's parent NZ Post had made a request for additional capital for the bank. Speaking at a press conference after a cabinet meeting, Key said NZ Post's board had asked the government for capital after a period of rapid growth by the bank. However, he denied the bank was “short of cash,” NBR reports.
“There are a number of options,” Mr Key said. “One is that we refuse that request, the second is that we could look to grow Kiwibank through a capital injection ourselves, just in the same way we did with KiwiRail.”
Both NZ Post and Kiwibank declined to comment on how much money the bank needs.
4. Money for Rural Portfolio investors - Investors holding redeemable preference shares in Rural Portfolio Capital will receive an interim 47 cents per share payment. In an NZX release the trustee and receivers of the firm, which along with Rural Portfolio Investments was set up by Craig Norgate and the McConnon Family to control PGG Wrightson, said to expect the payment this Friday.
5. Expensive Spanish bailout - The rescue of Spanish savings bank CajaSur, taken over by the Bank of Spain on the weekend, could ultimately cost up to E2.7 billion, according to reports. The bank, formerly controlled by the Roman Catholic Church and headed by a priest, will receive an injection of at least E523 million, the minimum amount needed to ensure financial stability.
CajaSur, based in Cordoba, lost E596 million euros last year on revenue of E426 million euros. It also lost E114 million euros in the first quarter of 2010. The Bank of Spain's Fund for Orderly Bank Reconstruction is now managing CajaSur.