Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Shareholders Endorse Acquisition of North South

23rd February 2006

Dominion Finance Holdings Shareholders Endorse Acquisition of North South Finance Limited

A significant step in the development and expansion of Dominion Finance (DFH) was approved yesterday at a special meeting of shareholders.

At the meeting shareholders endorsed the acquisition of all the issued shares of North South Finance Limited. The purchase price will be paid through the issuance of not more than 5,600,000 new ordinary fully paid shares with the balance of $30,000,000 in cash.

North South Finance Limited’s principal activity is that of a financier in New Zealand. North South has been carrying out these activities since 30 March 2001 and is a provider of financial accommodation and services in New Zealand including short term finance, bridging loans, mezzanine loans on developments and general mortgage finance secured over property and assets based in New Zealand.

At the Annual Meeting of shareholders in August 2005 the Board of Directors stated the future growth of DFH could not be driven solely from organic growth within the existing business of DFH. Therefore, to drive DFH’s and shareholder value, the Board considered that acquisitions were an appropriate alternative to obtain such growth.

Terry Butler, chief executive officer Dominion Finance Holdings says a number of
businesses had been identified as potential acquisition targets.

“We focused on North South Finance Limited because it fits DFH’s target acquisition growth strategy and operates in a similar market and manner to DFH’s wholly owned subsidiary Dominion Finance Group Limited (“DFG”).

“We understand the drivers that make North South Finance the successful operation that it is and have identified in North South Finance a number of opportunities to rationalise and economise their operations to add growth and value to the cost of acquisition.”

The Board considers that North South Finance is a well-run finance company, operating much along the same lines as DFG. It has good management controls, growth and profitability. In due course, the Directors see a saving in the administration, treasury, and accounting functions of the combined operations through economies of scale.

The Board envisages that the acquisition will:

a) Increase the DFH Group’s total assets by approximately $100 million to approximately $300 million; and

b) Increase Net Profit After Tax of the DFH Group by up to 50% post acquisition.

Capital Notes Issue

At the same meeting shareholders approved the issuance of up to 40,000,000 Capital Notes at an issue price of $1.00 per Capital Note. The principal purpose of the issue of Capital Notes is to:

a) raise capital to assist DFH in funding the acquisition by the Company of the North South Shares; and
b) assist DFH in continuing to finance the growth of the business operations of DFH’s wholly owned subsidiary, Dominion Finance Group Limited.

The terms of the Capital Notes provides for an interest rate of 9.40% per annum and will be fixed until maturity date of 15 October 2010. Interest will be paid quarterly in arrears on 15 January, 15 April, 15 July and 15 October each year. The balance of terms shall be included in the Prospectus due for release in the near future.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news