Strategic Finance's management and the Bank of Scotland International have struck a revised deal to buy the company from its owner Allco HIT, Strategic said yesterday.
Strategic's management and former owners have formed a consortium along with BOS International subsidiary Uberior Ventures to purchase the finance company which
owes 15,000 debenture investors $325 million.
An earlier deal which would have seen those investors continue to receive interest and principal repayments as usual was scotched by BOS International when the bank got cold feet over plunging investor sentiment in New Zealand.
BOS International's support is crucial as it has an existing $75 million line of credit to Strategic which will be increased to $150 million under the management buyoutplan.
The consortium's acquisition of Strategic Finance is now subject to the parties entering into a binding sale and purchase agreement now being negotiated and finalised.
"The Board of Strategic Finance will make a further announcement once the sale and purchase agreement has been executed," the company said.
Strategic chief executive Kerry Finnigan said the move announced yesterday was abig step.
"We previously had terms, they had to be renegotiated. Until they were renegotiated the deal wasn't going to go forward," he toldRadio New Zealand.
The acquisition remains conditional on regulatory approvals and the assent of Allco HIT's shareholder and Strategic Finance's perpetual preference shareholders and debenture and subordinated note holders.
Under the new agreement, Strategic's debenture holders will receive 30 per cent of their principal in three equal instalments over 18 months starting in March next year with the balance of their cash being converted into three, four and five-year bonds.
