Cavalier finds another buyer for its Auckland property, considers legal action

Cavalier Carpets has found another buyer for is Auckland property. Photo / NZME

Cavalier Corp said it had found another buyer for its Auckland property after the sale to Kinleith Land and Infrastructure Ltd fell through last week.

The company said its wholly-owned subsidiary, Cavalier Bremworth, had terminated its contract with Kinleith for failure to pay its deposit under the agreement.

Cavalier said it was still reserving the legal remedies available to it over the failed sale.

The company said it had entered into a new sale and purchase agreement with another third party on terms substantially the same as the previous agreement, except for the requirement of Cavalier to guarantee the obligations of Cavalier Bremworth under the lease and the increase in the purchase price of the Auckland property to $25.5 million - an increase of $900,000.

A deposit had been paid, and the new agreement is now only conditional upon either Cavalier shareholder approval or a waiver under NZX listing rules.

The transaction is on substantially the same, or more favourable, terms as the previous agreement which was overwhelmingly approved by shareholders at the special meeting in September, the company said.

Cavalier chairman George Adams said the company had received significant interest from various parties following last week's announcement that the sale had fallen through.

The name of the buyer was not disclosed but Adams said the new deal was with "a well-recognised, credible property investor".

"We expect settlement in the near future, following receipt of an NZX waiver or shareholder approval," he said.

"This is a positive step forward for the company. While we have sufficient headroom in the near term to continue the execution of our strategy, the property sale provides us with additional support and funding over the next few years until we begin to realise the financial benefits of our transformation," Adams said.

Kinleith Land and Infrastructure is owned by investment company Kinleith Continuation and directed by David Henry.

On September 28, Cavalier reported a net loss after tax of $21.5m, which it blamed on the Covid-19 lockdown.

Earlier this month, Cavalier announced its trading for the first quarter had been stronger than anticipated, with sales revenue up 3 per cent on the same time last year.

The company has said that the proceeds from the property sale would be used to strengthen its balance sheet and facilitate the change from synthetics to an all-wool and natural fibres business model.

Shares in Cavalier last traded at 35c, up 2.5c from Friday's close.