Archive | Lombard

Lombard reverse takeover nears completion

Published 4 May 2010

Insured Group Ltd – the former Lombard Group Ltd – made its initial allotment of 1.4 billion new shares yesterday in the reverse takeover of Australian Consolidated Insurance Ltd. The remaining 70 million shares will be issued when Insured has completed the compulsory acquisition process.

 

Australian Consolidated shareholders approved the reverse takeover on 10 March. Lombard’s ticker code on the NZX will change to INS on Thursday 6 May.

 

Earlier stories:

14 March 2010: Lombard shareholders approve reverse takeover

23 February 2010: Reverse takeover of Lombard to proceed

6 July 2009: Lombard announced reverse takeover as it faces NZX suspension Want to comment? Go to the forum.

 

Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Lombard shareholders approve reverse takeover

Published 14 March 2010

Lombard Group Ltd shareholders voted on Wednesday in favour of a reverse takeover by Perth-based Australian Consolidated Insurance Ltd.

Lombard announced the reverse takeover at the end of June last year as it faced the suspension of its shares if it didn’t present an annual report to NZX in the following week.

 

Under the reverse takeover, existing Lombard shareholders will receive an interest in an unlisted vehicle, equal to their current interest in Lombard, that contains Lombard’s residual assets, and Australian Consolidated’s businesses will become part of a listed group and its shareholders will own a majority of the shares in Lombard.

 

Lombard will be deregistered in New Zealand and incorporated in Australia.

 

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Reverse takeover of Lombard to proceed

Published 23 February 2010

Perth-based Australian Consolidated Insurance Ltd will proceed with the reverse takeover of NZX-listed Lombard Group Ltd, subject to shareholder consent. Meeting details, including resolutions, should be released on Thursday.

 

Lombard announced the reverse takeover at the end of June last year as it faced the suspension of its shares if it didn’t present an annual report to NZX in the following week.

 

Lombard chief executive Michael Reeves and Australian Consolidated executive chairman & managing director Wayne Miller said today that if this reverse takeover is approved:

existing Lombard shareholders will receive an interest in an unlisted vehicle, equal to their current interest in Lombard, that contains Lombard’s residual assets, andAustralian Consolidated’s businesses will become part of a listed group and its shareholders will own a majority of the shares in Lombard – if the takeover offer is accepted by all Australian Consolidated shareholders, they will hold 98.5% of Lombard.

 

Mr Miller formed Australian Consolidated in 2005, has been managing director but took over as chairman in November 2008. The company provides differentiated insurance products & services to purchasers of insurance. The group has 18 subsidiaries in the specialised insurance segments of insurance broking, underwriting agency, risk management & insurance premium funding. It manages $80 million of insurance premiums from offices in Perth, Sydney, Melbourne, Brisbane, Auckland & Hamilton. Before the takeover is completed, Lombard will reorganise its subsidiaries so assets & selected liabilities unrelated to the ongoing business are consolidated under a special-purpose subsidiary and existing Lombard shareholders will – for no consideration – receive shares in that company in their current shareholding proportion. If the takeover offer is successful, Lombard will make a cash buyback offer to all existing Lombard shareholders at a price equal to the exchange price for the new Lombard shares issued under the takeover offer (1.196c/existing Lombard share). Shareholders can accept all or part of the buyback offer. Lombard will send shareholders this week a notice of special meeting, profile document & independent valuation report.

Australian Consolidated acquired Hamilton-based underwriting agency Classic Cover Insurance Ltd on 30 June 2009, which added 15,000 clients to its distribution. Mr Miller said the company had identified substantial opportunities for expansion in Australia & New Zealand. Link: Australian Consolidated

 

Earlier stories:

6 July 2009: Lombard announced reverse takeover as it faces NZX suspension

2 June 2008: Lombard acting chairman blames receivership for loss

4 April 2008: Reeves blames systematic industry failure as Lombard seeks moratorium

 

Want to comment? Go to the forum.

 

Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Lombard announced reverse takeover as it faces NZX suspension

Published 5 July 2009

Lombard Group Ltd, facing suspension of its shares if it doesn’t present an annual report to NZX by Tuesday 7 July, announced a reverse takeover last Thursday.   The proposed takeover is by Perth-based Australian Consolidated Insurance Ltd, which extended its eastward coverage on 30 June, when it completed the acquisition of classic motor vehicle underwriting agency Classic Cover Insurance Ltd, of Hamilton.

 

Wayne Miller formed Australian Consolidated in 2005, has been managing director but took over as chairman last November.

Lombard chief executive Michael Reeves said on Thursday the struggling New Zealand finance company had entered into a conditional arrangement to acquire all the shares in Australian Consolidated, subject to shareholder & regulatory consents.

 

Mr Reeves said that, “after very careful consideration of the prospects of Lombard & its existing business, and very much endeavouring to act in the interests of all shareholders”, Lombard had identified this transaction as an exciting opportunity.

             

He said if all Australian Consolidated shareholders accepted the offer, they would hold more than 90% of Lombard’s increased capital. Mr Reeves said the exact proposed exchange value would be announced when formal documentation was provided to shareholders for their consideration.

 

Before takeover, Lombard would reorganise its subsidiaries, creating a special purpose subsidiary to hold assets & selected liabilities unrelated to the ongoing business. Lombard shareholders would also receive shares in that company on a pro rate basis.

 

“The rationale for this is that some assets are difficult to value in light of the current financial circumstances. Rather than see Lombard shareholders receive a low value in a transaction completed today, the assets will be held until their value becomes more certain. This special purpose company will be responsible for some of the residual liabilities of Lombard group companies.”

 

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Lombard loss reduced

Published 3 June 2009

Lombard Group Ltd’s board continued to group last week over the effects of receivership of part of the group as it reported an unaudited consolidated pro-forma $1.5 million after-tax loss for the March year.

 

This included  an impairment loss of $1.425 million resulting from the writedown of goodwill on the acquisition of United Home Mortgages Lted and an additional impairment of the $260,000 of secured debenture stock held by the parent company in its subsidiary (in receivership).

 

Last year the operating profit (before goodwill & impairment and after income tax) fell 21.9% to $5 million. After goodwill & impairment, the after-tax operating return fell from $4.2 million to a $21.8 million loss. Recognising the fundamentally changed economic environment now, the board elected to impair all of the goodwill on the acquisition of United Home Mortgages.

Chairman David Wallace said the auditors had indicated the financial statements would have a qualified opinion based on the fact that neither they nor the directors had the financial records for Lombard Finance & Investments Ltd & its subsidiaries, placed in receivership on 10 April 2008.

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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

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Lombard tries to liquidate Tasman Mortgage Brokers 4 days before court call

Published 27 March 2009

Lombard Group Ltd chief executive Michael Reeves said yesterday Lombard, as shareholder of Tasman Mortgage Brokers Ltd, had resolved to put Tasman into liquidation – 4 days before Inland Revenue’s application to wind the company up is due for hearing in the Wellington High Court.

 

Unfortunately for Mr Reeves, under the High Court’s rules now, he’s too late in taking that action and when the application goes to court the voluntary appointment should therefore be voided.

 

The application was transferred from Auckland to the Wellington High Court back on 9 February because the company’s registered office is there.

 

Mr Reeves has previously explained how Lombard ended up in its predicament with Tasman, and had another shot yesterday when he announced the shareholder resolution for a voluntary liquidation, which he said was to “assist in concluding the affairs of Tasman Mortgage Brokers Ltd & Tasman Mortgages Ltd (which doesn’t face an Inland Revenue application)”.

 

Tasman is a subsidiary of NZX-listed Lombard Group Ltd. In this case, however, Lombard has made it clear “the matter principally relates to unpaid income tax for a period prior to Lombard acquiring its shareholding in the Tasman Mortgages Group from Blue Chip”.

  Lombard acquired 70% of the shares in the Tasman Mortgages Group from Blue Chip Financial Solutions Ltd (now called Northern Crest Investments Ltd) on 1 July 2007 for $50,000 in cash, with the balance of the purchase price to be paid on an earn-out basis. Between then & 31 March 2008, Lombard arranged to acquire the remaining 30% of the shares for no consideration. In his release, he said “the matter principally relates to unpaid income tax for a period prior to Lombard acquiring its shareholding in the Tasman Mortgages Group from Blue Chip. “One of the obligations of the vendor, Northern Crest, under the sale & purchase agreement, was the vendor’s obligation to meet all taxation liabilities arising prior to the date of settlement. “As Northern Crest has failed to honour this obligation, the Inland Revenue Department has proceeded to make this application and are seeking payment from Tasman Mortgage Brokers. Lombard has been in dialogue with the Inland Revenue Department and has recently made a formal demand on Northern Crest under the warranties in the sale & purchase agreement. “Tasman Mortgage Brokers has not undertaken any new business for some considerable time. Tasman Mortgages Ltd is not subject to the application for wind-up by the Inland Revenue Department. “However, due to events that occurred prior to Lombard acquiring its shareholding in Tasman Mortgages Group, one of the major lenders has taken over management of that part of the mortgage book which relates to their funding. As a result of this, the trail income due to the Tasman Group has now significantly reduced, as has the quantum of mortgages under management.”

 

Receivers were called into subsidiary company Lombard Finance & Investments Ltd & 3 of its subsidiaries in April 2008, and Lombard Group Ltd put 9 solvent subsidiaries into liquidation in September.

 

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Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

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Balance of Lombard reports loss

Published 27 November 2008

Lombard Group Ltd has fallen from a $4.63 million pretax operating profit in the September 2007 half to a $406,000 consolidated pretax operating loss for the same 6 months of this year.Chief executive Michael Reeves said the directors had written down the value of the group’s main trading subsidiary, United Home Mortgages Ltd, by $339,000 to $1.086 million.After allowing for the writedown of goodwill, a writeback for overstating the impairment losses last year and tax, the reported result for the period is a loss of $439,000.

 

Mr Reeves said Lombard Group no longer had control over Lombard Finance & Investments Ltd & its subsidiaries, put into receivership on 10 April by its trustee, Perpetual Trust Ltd and hadn’t included their results in the Lombard Group accounts.

“The nature of the financial markets in which Lombard & its subsidiaries operate in is at present challenging, with market confidence low. Lombard is continuing to review its operations on a regular basis with a view to rebuilding business levels once conditions allow.”

 

Earlier stories:

10 September 2008: Lombard liquidates solvent subsidiaries – and receivers cut their recovery estimates

2 June 2008: Lombard acting chairman blames receivership for loss

30 May 2008: Receivers say non-earning loans on development properties slash Lombard book value

12 April 2008: U: The names behind the action, the week to 13 April 2008, part 5, Trustee calls receivers into 4 Lombard subsidiaries, non-executive directors quit

4 April 2008: Reeves blames systematic industry failure as Lombard seeks moratorium

3 December 2007: Lombard reports loss

 

Want to comment? Email [email protected].

                                       

Attribution: Company statement, story written by Bob Dey for the Bob Dey Property Report.

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Lombard liquidates solvent subsidiaries – and receivers cut their recovery estimates

Published 9 September 2008

Lombard Group Ltd said on Monday it was putting 9 solvent subsidiaries into liquidation. Over at PricewaterhouseCoopers, however, solvency was the last thing on the minds of the receivers of 4 other Lombard companies – they’ve cut their recovery estimates.

 

Chief executive Michael Reeves said most of the companies being liquidated were incorporated to protect the names and hadn’t traded or were no longer operating. He said the parent company acted only as a holding company, not a trading company.

The companies being liquidated are:Lombard Asset Management Ltd, Lombard Capital Ltd, Lombard Group Management Ltd, Lombard Holdings Ltd, Lombard Investments & Holdings Ltd, Lombard Investments Ltd, Lombard Ltd, Lombard Pacific Ltd & Lombard Superannuation Ltd.

 

The receivers of Lombard Finance & Investments Ltd, Lombard Asset Finance Ltd, Lombard Asset Finance No 2 Ltd & Lombard Property Holdings Ltd, PWC partners John Fisk & John Waller, said in their latest letter to investors, out last week, they expected recovery by secured debenture investors would drop from the 21-44% range anticipated in May to 19-40% now, as a result of deteriorating market conditions & marketplace uncertainty.

 

They said recoveries on the property loan book could drop by more than $4 million.

 

Lombard had $111.85 million in secured borrowings when it collapsed at the start of April, and it had $136.7 million on its property loan book. The receivers estimated in May they’d recover $29.4-53.7 million, but in their September newsletter they estimated the recovery was down to a range of $26.8-49.5 million.

 

The receivers said 56% of the property loan book was on bare land in coastal subdivisions or future development sites: “Given the slowing property market, we consider there is significant uncertainty regarding the length of time required to achieve an orderly selldown of these sites, resulting in increased holding costs & lower realisations. Consequently, we have reduced the range of recovery estimates from these bare land sites, and particularly from coastal subdivisions.

 

“We have reduced the ‘high’ recovery estimate in respect of a completed residential development in Auckland due to additional costs incurred in maintaining the value of the development.

 

“The timing of any investor payout is still uncertain due to the nature & difficulty in realising the companies’ assets. In particular, it may take an extended period of time to achieve an orderly selldown of bare land sites. Accordingly, it would be prudent for investors to assume they will not receive any distributions from the receiverships within the next 6 months. As soon as we have a better indication of potential timeframes for recoveries we will advise investors.”

 

Website: PWC Lombard page

 

Earlier stories:

2 June 2008: Lombard acting chairman blames receivership for loss

30 May 2008: Receivers say non-earning loans on development properties slash Lombard book value

12 April 2008: U: The names behind the action, the week to 13 April 2008, part 5, Trustee calls receivers into 4 Lombard subsidiaries, non-executive directors quit

4 April 2008: Reeves blames systematic industry failure as Lombard seeks moratorium

3 December 2007: Lombard reports loss

 

Want to comment? Email [email protected].

                                       

Attribution: Company statement, receivers’ newsletter, story written by Bob Dey for this website.

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Lombard acting chairman blames receivership for loss

Published 2 June 2008

Lombard Group Ltd’s acting chairman, Dave Wallace, has blamed the post-balance date appointment of receivers for the group’s lousy performance to 31 March.

 

Lombard increased revenue by 9.4% to $33.7 million but its operating profit (before goodwill & impairment and after income tax) fell 21.9% to $5 million. After goodwill & impairment, the after-tax operating return fell from $4.2 million to a $21.8 million loss, and the bottom line to a $21.74 million loss. NTA fell from 0.846c/share to 0.008c/share. Earnings/share fell from 0.18c to a negative 0.93c.

 

Mr Wallace said the financial performance for the year was dramatically affected by the receivership of the group’s significant subsidiary, Lombard Finance & Investments Ltd. Perpetual Trust Ltd called receivers John Fisk & John Waller (PWC) into Lombard Finance & Investments & its subsidiaries, Lombard Asset Finance Ltd, Lombard Asset Finance No 2 Ltd & Lombard Property Holdings Ltd, on 10 April. Mr Wallace became acting chairman after the other 3 independent directors, former Cabinet ministers Sir Douglas Graham (chairman) & Bill Jeffries, and Laurie Bryant, resigned on 11 April.

Mr Wallace said the board had made decisions regarding the presentation of the accounts which reflected its assessment of value of the group following the receivership. “The major implications of this approach are:

a $20.5 million impairment loss resulting from the writedown of Lombard Group’s $42 million investment in Lombard Finance & Investments, including the total write-off of $40 million of sharesa $5.9 million impairment of goodwill, andfunds held by Lombard Finance & Investments have been treated as frozen.”

The financial statements are unaudited. Mr Wallace said KPMG was auditing them, but said they’d have a qualified opinion because neither auditors nor directors had access to any of the records for the companies in receivership. He said the financial statements were prepared from the information the group held when the receivers were called in (in the form of management accounts as at 31 March).

 

“Given the trustee’s appointment of receivers on 10 April, the directors have elected to fully impair the balance sheet of Lombard Finance & Investments & its subsidiaries. Accordingly, the unaudited consolidated after-tax result for the year is a loss of $21.8 million.

 

“This includes $20.5 million impairment loss resulting from the writedown of Lombard Group’s $42 million investment in Lombard Finance & Investments, including the total write-off of $40 million of shares and $5.9 million impairment of goodwill.”

 

Mr Wallace was a director of Pure NZ Ltd, the company Lombard used to achieve a backdoor listing in 2005.

 

Earlier stories:

30 May 2008: Receivers say non-earning loans on development properties slash Lombard book value

12 April 2008: U: The names behind the action, the week to 13 April 2008, part 5, Trustee calls receivers into 4 Lombard subsidiaries, non-executive directors quit

4 April 2008: Reeves blames systematic industry failure as Lombard seeks moratorium

3 December 2007: Lombard reports loss

 

Want to comment? Email [email protected].

 

Attribution: Company statement, story written by Bob Dey for this website.

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Receivers say non-earning loans on development properties slash Lombard book value

Published 30 May 2008

The receivers of 4 companies in the Lombard finance group have told investors they’re likely to recover only 21-44% of their original investment and no interest.

 

Receivers John Fisk & John Waller, of PricewaterhouseCoopers, said: “At this time, we consider it highly unlikely that there will be any recovery for subordinated & capital note investors.”

 

All up, these investors had $127 million with the group when Perpetual Trust Ltd called the receivers in on 10 April to Lombard Finance & Investments Ltd and its subsidiaries, Lombard Asset Finance Ltd, Lombard Asset Finance No 2 Ltd & Lombard Property Holdings Ltd.

 

Lombard Finance & Investment had 27 loans valued at $136.8 million on its books, but the receivers said most of the loans were for bare-land subdivisions or development properties, in various stages of completion: “On the majority of these loans, interest accruing is added to the loan balance and received on repayment of the loan, as opposed to interest being paid to Lombard on a monthly or quarterly basis.

 

“We are working with a number of stakeholders to recover these loans. However it is clear that this will be a complex, costly & time-consuming exercise.”

 

The receivers said the stated $800,000 provision for doubtful debts was significantly understated.

 

3900 secured debenture investors held 6400 investments worth $111 million at the date of receivership, 310 investors held 450 investments in capital notes worth $10.4 million and 230 investors held 330 investments in $3.7 million of subordinated notes.

 

Website: PWC Lombard page

 

Earlier stories: U: The names behind the action, the week to 13 April 2008, part 5, Trustee calls receivers into 4 Lombard subsidiaries, non-executive directors quit

4 April 2008: Reeves blames systematic industry failure as Lombard seeks moratorium

3 December 2007: Lombard reports loss

 

Want to comment? Email [email protected].

 

Attribution: Receivers’ release, story written by Bob Dey for this website.

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