Decision Made On Terralink Sale
Terralink's receiver, Gary Traveller, announced today that the receivers have accepted an unconditional offer from a New Zealand-based consortium to buy the assets of Terralink.
“A consortium comprising New Zealand companies New Zealand Aerial Mapping (NZAM) and Animation Research Limited (ARL), have made a successful bid.
“This is an exceptionally good result which, in our professional judgement, reflects the best possible outcome that could have been achieved out of the sale process.
“The consortium intends to offer jobs to Terralink staff.
“Initially, we had planned to proceed to due diligence for all the parties who had made indicative bids. However, the consortium indicated at an early stage that they would be prepared to pay a premium for Terralink as long as the other bidders did not go through the due diligence process, because of the commercial sensitivity of the work Terralink is doing in some areas. Allowing a number of other companies to go through the due diligence process would have destroyed much of the value of Terralink to the consortium.
“Once we had established the likely amount of the consortium’s bid, we allowed them to go through a confidential due diligence process before the rest of the bidders. As a result of that process, the consortium made its unconditional offer.
“That offer was the best offer we were likely to receive for Terralink. It compared very favourably to the indicative (non-binding) bids. It also compared very favourably to an independent valuation we obtained.
“Therefore, rather than risk losing the consortium’s offer in the unlikely hope that a better offer might come in, we accepted the offer.
“The proceeds of the sale will go to paying final receivership costs including settling preferential creditor claims (principally IRD), and repaying the debenture held by the Government over Terralink. Any money left over will be divided up among unsecured creditors – which includes staff who are owed redundancy entitlements.
“Not only does this result fulfil our duty of maximising proceeds from the receivership, we believe it is the best possible result for Terralink staff and Terralink’s clients, the Government as debenture holder and the unsecured creditors of Terralink, who now have some prospect of receiving a payment,” said Mr Traveller.
PricewaterhouseCoopers were appointed as receivers to Terralink on 15 January, as a result of ongoing losses incurred from a contract with EDS. In February, the receivers announced that Terralink would be sold, saying restructuring the company and trading out of its difficulties was not an option.