Shaky Wilson Neill may shed family restaurant chain

By KARYN SCHERER, Associate Business Editor

Troubled investment company Wilson Neill is believed to be seeking a buyer for the Cobb & Co family restaurant chain.

The move comes amid increasing concern about Wilson Neill's finances - its share price this week dropped to an all-time low of just above 1 cent.

The unlisted public company is believed to have more than 7000 shareholders.

Over the past 18 months, it has issued more than 1 billion new shares, many to former and existing directors of the company. A large portion have since been sold.

In February, the company claimed it had sold 27 per cent of its wireless internet subsidiary, Radionet, to a Panamanian communications company, WeCU.

It has since admitted it has yet to receive the full amount for the deal - said to be worth $17.5 million.

In July, the company announced a new majority owner, Transram - a joint venture involving WeCU and a Hamilton-based charitable trust, but that deal has also yet to be settled.

Companies Office records show a debenture of $1.2 million was placed over the company and several of its subsidiaries, including Cobb & Co, by Christchurch company Gold Band Finance four weeks ago.

The debenture was signed off by lawyer Ben Barker, who is handling the Transram deal.

In November last year, Mr Barker was listed as Wilson Neill's seventh-biggest shareholder.

Also looming over the company is a legal battle to force it to honour a claimed $2.7 million deal to buy internet company Yippee, which is in liquidation.

The case is due to go to court in January.

Another Wilson Neill asset, publishing company IT Media, is understood to be struggling.

One of IT Media's main assets, internet retailer FlyingPig, closed this week after a dispute with its main creditor.

The company won the contract to produce Foodtown magazine for Progressive Enterprises.

The magazine is believed to be subsidising other loss-making publications such as New Zealand Business Times, which was launched in March.

In April, it sold music magazine Rip It Up to the Satellite Media Group.

IT Media managing director Tim Connell quit as Wilson Neill's managing director in July, four months after taking a major stake in the company.

Wilson Neill was due to report its annual result several months ago but informed shareholders last month it had changed its balance date from the end of March to the end of June.

It is now due at the end of this month.

An interim report to shareholders dated October 24 but received by some shareholders only this week stated that the Cobb & Co franchise has been "relatively stable".

Another asset, Parnell restaurant Iguacu, "continues to perform well", the report said.

Companies Office records show that in March, 10 million shares were issued to nominee companies of former Wilson Neill directors Paul Hyslop and Colin Herbert as payment for "introducing and brokering" the purchase of IT Media.

In February, 7 million shares were issued to the Auckland-based managing director of WeCU, Russell Kerr, as commission on the Radionet sale.

Shareholder Ian Andrews, who has been a persistent critic of the company, said yesterday he was concerned it had not sought shareholder approval for two share deals.

Wilson Neill's white knight shows up 'smooth' but less than shiny

In its letter to shareholders three weeks ago, Wilson Neill admitted that its deals with technology company WeCU had not been "completely settled".

Chairman Trevor Mason said the company had received "well over half" the $17.5 million it was promised 10 months ago and it continues to insist the deal is close to being settled.

A Business Herald investigation has revealed it is not the first time WeCU has strung out a suitor.

In September last year, Florida-based communications company AmeriNet announced it intended to buy WeCU (pronounced "we-see-you"). The deal never went ahead.

AmeriNet spokesman Charles Scimeca yesterday described his dealings with WeCU chief executive Shawn Okon as "a very bad experience".

"We tried to make a deal with him but when it came down to doing the deal, he could never come up with anything," said Mr Scimeca.

"We spent a lot of time and a lot of money on it, but he just couldn't produce.

"We would have sued him, but there's nothing to sue."

According to Mr Scimeca, Mr Okon told AmeriNet he had "a big telephone contract" in New Zealand.

"He told us he had $US30 million [$71.5 million] in assets in Costa Rica. He couldn't prove one dollar." AmeriNet gave up after six months.

Mr Scimeca described Mr Okon as "a very smooth talker" and "very intelligent".

"If there's a company there he's doing business with, I'd tell them to be real careful ... He knows the communications business. He may even have been with the CIA sometime, for satellite transmission.

"That's where he plays his cloak-and-dagger stuff."

WeCU's website, which is notable for a paucity of factual information, claims the company's revenue topped $US50 million "last year". It does not say to which year that refers.

In September last year, it told AmeriNet it had revenue for the previous nine months of $US1.6 million. It claimed assets of $US2.7 million, and liabilities of $US500,000.