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Feltex receivership wraps up with plug puller ANZ still owed almost NZ$20 mln, unsecured creditors and shareholders out of pocket

Feltex receivership wraps up with plug puller ANZ still owed almost NZ$20 mln, unsecured creditors and shareholders out of pocket

The six and a half year receivership of carpet maker Feltex  has come to an end with ANZ, the bank that pulled the plug on the stricken carpet maker, still owed north of A$16 million (just under NZ$20 million at today's exchange rate).

Receiver McGrathNicol, appointed by ANZ on September 22, 2006, says in its last report ANZ is owed A$2.45 million, plus accrued interest since its appointment. A report from liquidator McDonald Vague earlier this year suggested ANZ was still owed "in excess" of A$16 million including interest and costs that have accrued since 2006.

Feltex was tipped into receivership after a frustrated ANZ, which was owed A$119.5 million, pulled the plug. The receivership came little over two years after Feltex shares were sold for NZ$1.70 each in a NZ$254 million June 2004 initial public offering when private equity group Credit Suisse First Boston Asian Merchant Partners sold out. McGrathNicol was appointed receiver and McDonald Vague was subsequently appointed liquidator in December 2006.

Australian rival Godfrey Hirst bought Feltex out of receivership on October 20, 2006.

McDonald Vague says it has received 614 claims from unsecured creditors worth almost NZ$13.9 million. It has also received claims worth nearly NZ$6.3 million from 166 Feltex shareholders. The liquidator is taking legal action against Feltex's auditor Ernst & Young and expects a court hearing in November this year, or possibly in September.

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Lets see then, ANZ is owed 20 million out of 120 million, or better said it got 86% of it's capital back. I am confident that over time ANZ earned enough from Feltex to not have lost any money. The receivers got paid their fees before any money was distributed. The underwriters to the IPO earned a bit of money for their services, a big bit! And mom and dad investors got shafted.

Anybody else going to pay...? I don't think so!

Not only does it takes talent to ruin a good business like Feltex, but to bankrupt it 2 years after the IPO, smacks of corrupt business practices. 

Heads should roll!



Hevi, as Brian Gaynor outlines nicely here (…), the seeds of the company's demise were sown in its 2000 acquisition of the Australian operations of Shaw Industries. This debt funded deal transformed Feltex from a predominantly New Zealand-based wool carpet producer to an Australasian company with more than 60% of its production in synthetic carpets.