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CBL watershed meeting deadline extended

CBL watershed meeting deadline extended, Goldman Sachs hired as adviser

By Sophie Boot

March 23 (BusinessDesk) - The CBL Corp saga will continue, with the company's voluntary administrators postponing the creditors' watershed meeting to gather more information and hiring Goldman Sachs as an adviser.

Auckland-based CBL appointed KordaMentha voluntary administrators on March 2 after the Reserve Bank sought an interim liquidation of its New Zealand supervised arm and the Central Bank of Ireland made a similar move against the insurer's European division.

CBL had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority (FMA), the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL’s international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.

Today, KordaMentha said it the Auckland High Court had granted it orders extending the date by which it must call the watershed meeting, normally held within 25 working days of the appointment of administrators, to May 11. The second meeting of creditors gives them the choice to resolve that a deed of company arrangement be executed, resolve that the administration should end, or appoint liquidators.

KordaMentha must release the watershed report to creditors and the market by May 11, and the meeting must be held by May 18th. The administrators may need to seek a further extension from the Court if it becomes apparent in the coming weeks that further time will be required, they said.

The administrators said the extension would give them enough time to review of the financial position of the entities under their control, and the wider CBL Group; analyse realisation options for the group's assets, for which it's appointing Goldman Sachs to advise on options; and consider other relevant factors such as "any transactions that may be scrutinised or claims that may be made."

Earlier this month, the Reserve Bank asked for CBL Insurance to be put into interim liquidation because the company paid $55 million to overseas companies in defiance of central bank orders. In an affidavit, the bank's head of prudential supervision Tony Fiennes said the bank believes CBLI has $750 million in assets, mainly in cash and insurance receivables, and there is serious risk the directors could further dispose of those or that overseas creditors could ask for freezing orders.

(BusinessDesk)

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