Wellington, New Zealand, October 3, 2006--Australian carpet maker Godfrey Hirst is to buy debt-laden New Zealand rival Feltex Carpets as a going concern, Feltex's receivers said on Tuesday.
The privately-owned Godfrey Hirst was the only bidder for Feltex and would take all of the assets and undertakings in New Zealand, Australia and the United States, receiver Colin Nicol said in a statement.
No price was disclosed but the amount was sufficient to repay the existing bank facilities, he said.
Feltex was placed in receivership by ANZ Banking Group Ltd. on Sept. 22, after the bank said it was taking too long to resolve the carpet maker's financial problems, including a debt of A$120 million ($90 million) owed to the bank.
The buyout was Godfrey Hirst's third attempt to acquire some or all of Feltex.
Between last August and January this year it acquired an 8.7 percent stake and proposed a merger of the two companies, which was rejected by Feltex's board in March.
In August, Godfrey Hirst offered NZ$141.8 million ($93 million) for Feltex, but withdrew on Sept. 6 because it thought the offer would not be accepted by shareholders.
Godfrey Hirst's NZ general manager Tania Pauling said there would be a complete review of all operations.
"But we see it as a parallel operation rather than an overlap, there will be some merging but we need the capacity to feed the market," Pauling said.
Around 120 jobs, all in New Zealand, are expected to be axed from Feltex's total 1,300 staff.
A New Zealand-based consortium headed by bedmakers Graeme and Craig Turner withdrew a NZ$51 million package last Friday because they said they could not assess the damage done to Feltex's reputation and business from going into receivership.
Godfrey Hirst, which is controlled by expatriate New Zealanders, the McKendrick family, will end up with close to 50 percent of the carpet market in New Zealand and Australia.
Shareholders in Feltex, floated by the private equity arm of Credit Suisse First Boston in a NZ$254 million share offer in 2004, are expected to be left with nothing but a shell company, which last traded at 3 NZ cents each before trading was suspended on Sept. 25. ($1=A$1.34, $1=NZ$1.52)
