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Pyne Gould says fund put in receivership is `an old shell'

Pyne Gould says Torchlight Fund No 1, put in receivership by Sydney-based Wilaci, is 'an old shell'

By Jonathan Underhill

June 12 (BusinessDesk) - Pyne Gould Corp., the asset management firm controlled by South Island entrepreneur George Kerr, says the Torchlight Fund No 1 LP, which was placed in receivership by a company associated with WorleyParsons chairman John Grill, is "an old shell" in dispute over residual payments on a loan.

Kare Johnstone, William Black and Jason Preston of McGrathNicol were appointed receivers of Torchlight Fund No 1 on June 10, according to a note on the corporate advisor's website. Black told BusinessDesk that his firm had been appointed by Wilaci Pty Ltd, a Sydney-based lender, relating to a "monetary default."

Wilaci owns 4.9 percent of ASX-listed engineering consultancy Worley Parsons, according to its 2013 annual report, and is one of several entities associated with that company's chairman.

Pyne Gould, which recently relocated to Guernsey, has been selling non-core assets to focus on its Torchlight Investment Group, which aims to buy undervalued assets by targeting distressed debt situations. In its first-half report, Pyne Gould refers to Torchlight Fund No 1 as a related party from which it received management and other fees. NBR Online reported that the fund's assets and liabilities were understood to have been transferred to Torchlight Fund Ltd of the Cayman Islands in late 2012.

"An old shell, Torchlight Fund No 1 LP, is in receivership," Pyne Gould said in a statement, after halting its shares for the announcement. "The receivership is being challenged and likely to be subject of commercial litigation. It relates to a dispute over a loan where the principal has been fully repaid but the parties cannot agree on the amount and timing of any residual payments."

Pyne Gould posted a loss of $6.63 million in the six months ended Dec. 31, although its Torchlight business recorded a cash profit of $2.19 million.

McGrathNicol's Black said it is too early in the receivership for his firm to make any comment. "What we're doing at the moment is investigating and analysing the position of the fund," he said.

The shares were down 4.9 percent to 39 cents when they resumed trading on the NZX, and have gained 37 percent in the past year.


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