NZ Automotive’s bank has pulled its funding over the company’s boardroom issues. Photo / NZ Herald
NZ Automotive Investments (NZAI) says its bank is unable to give any assurance of support for its trade finance and motor finance facilities beyond current expiry dates.
The company said the advice was understood to relate to recent announcements about changes in company leadership and governance, as opposed to the current or forecast financial position of the business.
All non-executive directors of the company, Charles Bolt, Tim Cook and Tracy Rowsell, as well as executive director and founder shareholder Eugene Williams – who owns 34.4 per cent of the company – resigned last month.
NZAI said the trade finance facility was used to fund the purchase of imported motor vehicles and operated under a limit of $8 million.
The amount of $8m had been drawn under this facility as at June 30. This facility has a maturity date of 31 December 2022.
The motor finance facility has a limit of $6m and a maturity date of February 24, 2024.
As at June 30, $4 million had been drawn down under this facility.
“The outgoing board expects that the incoming board and management of the company will engage with the current financier regarding arrangements for the trade finance facility that matures in December 2022,” NZAI said.
The company said it was in a sound financial position and in compliance with all of its banking covenants as at July 31.
As of June 30, the company had cash of $5.5m, net debt of $6.5m and total equity of $15.2m.
“The company has continued to trade profitably over the first four months of the new financial year,” it said.
A more detailed update of the company’s financial performance and position will be provided to the market on or before August 20.
NZAI’s annual meeting is due on August 25.
Separately, NZ RegCo, the NZX’s regulatory arm, has queried the independence of NZAI nominees Gordon Shaw and Michael Stiassny.
NZAI’s major shareholder David Sena – who has 46 per cent of the company – said yesterday he was confident the board nominees would qualify as independent directors.
NZ RegCo had asked NZAI to provide, by close of business yesterday, information relevant to the used car dealer’s continued ability to comply with NZX listing rules and corporate governance obligations.
“NZ RegCo regards these governance requirements as fundamental obligations for NZX listed issuers, and critical for the protection of shareholder interests,” it said.
There had been no new announcements on the matter from NZ RegCo this morning.
NZ Shareholders’ Association chief executive Oliver Mander said the association was happy that Shaw, who had a background with Vehicle Inspection NZ, and Stiassny, who had experience in corporate governance, restructuring and insolvency, would fit the bill as independent directors
Stiassny and Shaw have advised they would accept an invitation to join the NZAI board from August 21.
Governance issues have weighed heavily on the company’s share price over the last month.
The stock traded on Monday 50c, down from 65c just before the boardroom spill.
NZAI – the company behind 2 Cheap Cars – listed on the NZX in February last year.
The stock was a direct listing, meaning no new securities were issued.
NZAI’s issue price at the time was $1.30 a share.
