Veritas shares jump as ANZ pushes out loan maturity

Veritas Investments executive director Michael Morton. Photo / File

Veritas Investments has again had its debt deadline extended by its bank to let it continue discussions for possible deals.

In August, ANZ Bank New Zealand said it wouldn't renew $28.5 million in banking facilities which come due in October and November this year. That was extended in October, meaning the majority of its debt was due to mature today. It has now been pushed out until February 28.

Veritas is in discussions with external parties "on a number of scenarios including asset sales, mergers and refinancing", the company said in a statement, adding that "the board is in active discussions with a number of parties, but all proposals remain incomplete." This is the same statement it made in October.

The shares jumped 25 per cent, or 1.4 cents, to 7 cents, having slumped 72 per cent this year.

Last month, the company was publicly censured and fined $55,000 plus costs by the NZ Markets Disciplinary Tribunal for failing to immediately disclose to the market that it had agreed to sell or close its Nosh business as a condition of continued support from its bank in 2016.

Veritas failed to disclose that to retain ANZ's support in September 2016, it had agreed either to provide the bank with an unconditional contract to sell Nosh by January 15 this year or, failing that, evidence it had closed the high-end supermarket chain by March 31.

The firm eventually disclosed the undertakings on December 14 last year "following engagement by NZX Regulation". In the event, it agreed to sell Nosh to Gosh Holding for $4m last February but ended up in dispute with Gosh over breaches of the sale agreement. It had taken on a $5m funding line from ANZ to buy Nosh in 2014 but struggled to turn it into a profitable business.

According to their latest accounts published in August, Veritas repaid $4.8m of bank debt in the 12 months ended June 30 after ANZ leant on it to map out a strategy to sell unprofitable businesses and review its capital plan. That included the sale of the upmarket Nosh supermarkets and the company-owned Mad Butcher stores.

Veritas's results were at the upper end of guidance, with revenue falling 7.8 per cent to $30.8m. It narrowed its net loss to $793,000, or 1.83 cents per share, in the June year, from $4.6m, or 10.6 cents, a year earlier.

The board prepared its annual accounts on a going concern basis, though it acknowledged that relied on finding alternative funding sources within the bank's timeframe or winning a reprieve from the bank.