Published 6 July 2010
The remaining $1.04 million balance of a loan owed by small listed company Mercer Group Ltd has been shifted from one related party to another.
Mercer said on Friday that South Canterbury Finance Ltd had assigned the balance to Gresham Finance Ltd. South Canterbury’s shareholders, Allan & Jean Hubbard, own 45% of Mercer while Gresham owner Humphry Rolleston is a director & 18.6% shareholder of Mercer and former director of South Canterbury.
Mercer, which changed its name from Broadway Industries Ltd at its annual meeting last November, is a manufacturer of stainless steel products.
Chairman Ian Farrant said in May the company’s bank, Westpac NZ Ltd, had told it that it was in breach of its interest cover covenant, which required earnings to be no less than 2.25 times the funding costs for the 6-month period to 31 December 2009. The actual achieved ratio was 1.9 times. Mercer subsequently drew down $1.5 million from Gresham, which shareholders had authorised at the annual meeting, using the funds to reduce bank debt. It also put principal payments to non-bank lenders on hold in May, although it continued to make interest payments.
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Attribution: Company releases, Companies Register, annual report, story written by Bob Dey for the Bob Dey Property Report.