Statement from Turner Press Conference
STATEMENT FROM TURNER PRESS CONFERENCE
Friday 22 September 2006
Given the significant public interest surrounding the future of Feltex, we felt it important to provide this opportunity to confirm developments overnight with respect to our rescue bid for Feltex.
It is clear from statements and action from shareholders and Feltex workers and the Feltex Board this morning that the ANZ Bank’s decision is seen as rash, precipitous and as a turnaround on undertakings it had given to the company.
In particular, that the ANZ had given Feltex an assurance that it would not take action prior to October 20 to allow a refinancing and recapitalisation package to be agreed and effected via a shareholder vote at the company’s EGM.
Let’s be clear, this bid was put together and backed by some of New Zealand’s leading businessmen. It also had the support of the Bank of New Zealand to re-finance Feltex and become its bank going forward.
The ANZ was in no doubt that we had the funding, the expertise and support of both Feltex shareholders and staff to take on Feltex and its obligations to staff, shareholders and creditors.
As you know the ANZ Bank has now appointed a receiver to Feltex Carpets and its Australian subsidiaries.
As we said, the Bank has taken this extremely serious action in the full knowledge that there was a fully funded rescue package to keep the company as a going concern and protect the interests of Feltex Carpets 1300 staff, shareholders and creditors.
As the Feltex Board has noted it their statement this morning, in its letter to the Company, the ANZ Bank noted the discussions with both Godfrey Hirst and the Turners but stated, “You have been unable to complete a transaction which will enable the ANZ to be repaid its debt in full. The progress of negotiations is no longer satisfactory to the ANZ”.
This is despite the fact that the ANZ Bank agreed to write off a certain amount of its debt in connection with the deal reached between the Company and Godfrey Hirst in August 2006. In addition we had also agreed with the bank that the ANZ Bank would write off an agreed amount of its debt in connection with our proposal.
The rescue package required the ANZ Bank to fund working capital for Feltex for the next month until the shareholder vote at the company’s EGM. At the completion of the sale of Feltex that amount was to be repaid to the ANZ.
The ANZ was not prepared to provide that support to Feltex to enable shareholders to vote on the rescue package.
We were concerned and surprised by the ANZ’s action to put Feltex into receivership as we had agreed a deal with them. We are looking at all our options now. We can't rule out the option of legal action, but we now need time to work through those issues.
We want to reiterate that this will be an extremely difficult day and time ahead for Feltex workers and their families, shareholders, creditors and the communities, which rely on Feltex. Our thoughts are with them and we thank them for their support over the past two months.