PGC takes share of NAB loan to EPIC fund

PGC takes share of NAB loan to EPIC fund

By Paul McBeth

July 11 (BusinessDesk) – Pyne Gould Corp. has taken a $14 million stake in National Australia Bank’s loan to a related fund, Equity Partners Infrastructure Company No. 1 Ltd. (EPIC).

The deal lets the EPIC off the hook on a likely default and will help the orderly sale of its assets, the investment company said in a statement. The NAB facility was due for repayment on April 30, but the lender waived that condition on the proviso EPIC significantly reduced its debt by the end of June, according to the NZX Market Supervision decision allowing the related party deal.

“Reaching agreement on the participation agreement with NAB and obtaining the NZX waiver are important first steps on the path to assist EPIC with its restructuring,” chairman Bryan Mogridge said. “The participation also provides a favourable return to PGC investors in participating in a strong first registered position over EPIC.”

EPIC is managed by PGC’s Epic Partners Asset Management, a unit it bought from cornerstone shareholder George Kerr for $18 million, and through which it holds an 11% stake.

PGC will put up $7.5 million today, and pay a second tranche of $6.5 million by July 15. The investment company will receive interest and fees relative to its share of debt, and will rank behind NAB if EPIC misses a payment.

The agreement will expire at the end of April next year, and PGC expects full repayment will be made before then once EPIC’s assets are sold.

The restructure comes just three months after Kerr’s Torchlight Fund No. 1 LP injected $12 million through a subordinated convertible note in EPIC to pay for the fund to maintain its stake in the motorway assets.

Last month, EPIC chairman Margaret Devlin told shareholders the fund’s manager is assessing the sale of its water assets. It is also evaluating an offer for its motorway investment and said shareholders indicated they wanted to exit that asset.

The shares were unchanged at 37 cents in trading on Friday.

(BusinessDesk)

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