Pyne Gould takes control of Torchlight Fund in deal with aggrieved investors
By Paul McBeth
July 11 (BusinessDesk) - Pyne Gould Corp will take control of its Torchlight Fund as part of a deal with unhappy investors, including Accident Compensation Corp and Crown Asset Management, who had pursued the distressed asset investor through the Cayman Islands courts.
The investors sought to have Torchlight Fund wound up after losing confidence in the Pyne Gould-owned general partner over concerns about its management, but no longer want to pursue the three-year-old litigation after an "exhaustive court process", the Guernsey-based, NZX-listed company said in a statement. A countersuit by Pyne Gould's general partner claiming the investors were conspiring to get early liquidity was also dropped.
"The general partner and Aurora (Funds Management), CAML (Crown Asset Management) and ACC, together with MIML (Macquarie Investment Management), are pleased to be able to say that they have resolved their differences and settled the disputes among them," Pyne Gould said in a statement. "The general partner notes that throughout the court process, Torchlight Fund has continued to perform well."
The terms of the deal, including the value, were confidential. All parties agreed on a number of public statements, including that the investors see "potential value in the fund under the direction of the general partner" but that the investment no longer suited their needs and sought redemptions at an agreed sum, which the Pyne Gould unit agreed to do. The general partner oversees the fund.
The settlement means Pyne Gould will keep full ownership of the general partner, while its direct interest in the Torchlight Fund increases to 70.4 percent from 44.2 percent without Pyne Gould investing extra capital, it said. That will lift the company's net tangible assets which will show up in the 2019 financial year results.
"The net outcome of the litigation is a material increase in NTA for PGC," it said. The shares jumped 11 percent to 30 cents.
Pyne Gould has targeted distressed assets through its Torchlight Fund LP, a division it set up in 2009 to house toxic Marac Finance property loans that needed a longer timeframe for value to be realised as part of the recapitalisation of the finance company. Those investments include 100 percent of residential land investor RCL, which has a landbank of 4,000 sites across Australia and New Zealand.
Today it said RCL was its major asset and has been through a successful financial and strategic restructuring, with plans to develop out a landbank in Australia and New Zealand.
Pyne Gould, which is controlled by managing director George Kerr, settled litigation with Australian businessman John Grills' Wilaci unit earlier this year over a disputed loan repayment.,