Update, 8 September 2002: Savoy Equities Ltd has decided not to seek listing for its rights issue. Allotment has been set back a week to 23 October.
Savoy working with litigation funders on Britomart claim
Rights issue announced after small profit
Listed penny dreadful Savoy Equities Ltd’s former subsidiary, Savoy Properties Ltd, has commissioned independent queen’s counsel opinion for litigation funders interested in pursuing its claim against Auckland City Council for cancelling its Britomart project in 1999.
Through a distribution of all the shares in the relevant subsidiary, Savoy Properties Ltd, and its group of companies, Savoy Equities shareholders will have an interest in the possible litigation only through their direct Savoy Properties shares.
Savoy Equities completed the in-specie distribution of all the shares in Savoy Properties & group, on a pro-rata basis on 25 July by the allotment to all shareholders on the Savoy Equities share register on 19 July.
The distribution keeps alive Savoy Properties Ltd’s claim against the council over the cancellation of the Britomart project which preceded the present smaller-scale redevelopment, and will enable the substantial Savoy Properties group tax losses not to be affected by future issuance or dealing in Savoy Equities shares.
Savoy Equities made an operating profit of $159,000 on revenue of $333,000 in the June half, compared to a $333,000 loss on $15,000 of revenue a year earlier. Earnings/share were 2.71c, compared to a 5.71c loss.
The half-year profit resulted after Savoy reached a compromise with creditors in June. The company issued just under 7 million redeemable preference shares at 2c/share to creditors on 30 August, in payment of debt of $139,806, as approved at the annual meeting in June
The approval allowed the issue of up to 25 million redeemable preference shares at no less than 2c/share before 28 September 2002. If they’re not redeemed for cash before 30 June 2004 they will convert to ordinary shares on the basis of 5 ordinary shares for every 4 preference shares.
The company is still looking at businesses to back into Savoy. It announced a renounceable rights issue at 0.5c/share, record date 13 September, allotment 16 October.