NZF - MARKET INFORMATION
21 May 2012
NZF GROUP SUSPENDS INTEREST PAYMENTS CAPITAL NOTES
As announced to the market on 27 April 2012, freezing orders over the assets
of NZF Group have been maintained by the High Court in proceedings brought by
the Receivers of NZF Money Limited (in receivership). Those freezing orders
permit payments to be made in the ordinary course of business by NZF Group
Limited provided that the prior consent of the Receivers has been obtained.
Next month, NZF Group has an interest payment due on its capital notes
amounting to approximately $270,000.00 in aggregate. NZF Group approached the
Receivers and requested their prior consent to the interest payment on the
basis that it is an ordinary course of business expense for NZF Group. The
Receivers have declined to give consent to that payment and refuted that it
is an ordinary course of business expense.
The Board of NZF Group has met and resolved that in light of the Receivers''
position under the freezing orders, the company must suspend interest
payments on the capital notes. Such payment is suspended in accordance with
condition 3.2(a)(iii) of the Trust Deed constituting the capital notes which
provides that the company may suspend interest payments if such payments
would or would be likely to result in the company breaching a legal
obligation. It is the opinion of NZF Group that making the interest payments
in the absence of the Receivers'' consent would constitute a breach of
freezing orders and would therefore be a breach of a legal obligation.
Accordingly, it is likely that interest payments will remain suspended until
the substantive proceedings connected with the freezing orders are heard and
determined by the High Court. No date has yet been set.
ENDS
End CA:00223050 For:NZF Type:INTEREST Time:2012-05-21 09:20:56