Wellington, New Zealand, September 22, 2006--Feltex Carpets Ltd., was placed in receivership by its banks, just two years after being sold in a public offer by a private equity arm of Credit Suisse Group.
Australia & New Zealand Banking Group Ltd., the third-largest Australian lender, named McGrathNicol & Partners as receivers after Feltex failed to repay NZ$135 million ($106 million) of debt. The bank didn't agree to a deal with an investor group that had NZ$63.5 million to refinance the company.
The receivership marks the end of a two-year stint for Feltex as a listed company that was marred by missed profit targets, loan breaches and departing executives. Credit Suisse First Boston Asian Merchant Partners LP raised NZ$243 million in its May 2004 IPO of Feltex, selling shares at NZ$1.70 apiece. The stock fell to 1.2 cents today, valuing the company at NZ$1.8 million.
Feltex's directors had recommended a financing plan by investors led by Graeme and Craig Turner to ANZ Bank. "An opportunity to recapitalize the company and provide a future for the company was, in the board's view, still viable under the Turner proposal,'' Feltex said in a statement today.
The Turners refinancing plan was dependent on ANZ Bank funding the company until shareholders could vote on the plan in a month's time.
"The ANZ was not prepared to provide that support,'' the Turners said in an e-mailed statement today.
Feltex operates 10 mills in New Zealand and Australia, and accounted for a quarter of the two nation's carpet manufacturing in 2004.
Australian carpet maker Godfrey Hirst this month withdrew a NZ$142 million offer for the business and subsequently made a direct offer to ANZ Bank, Feltex said today.
The bank refused to say why it isn't proceeding with the Turner-led investment package and may have received an offer from Godfrey Hirst for some of the Feltex plants, Graeme Turner said in an interview on Radio New Zealand today.
Agreements the bank made last week are enforceable and the bidding group may consider taking legal action, he said.
Feltex "firmly believes that the debt to the ANZ Bank would have been repaid, or restructured, satisfactorily as an outcome of recent efforts by the company,'' it said.
