Published 27 November 2008
Temporary seating specialist Eventscape Ltd (Jason Paama & Mike Wyatt) has gone into liquidation with debts of about $6 million, but only after its biggest creditor, Allan Hawkins’ Cynotech group, bought the business.
The pre-liquidation sale was done with the blessing of liquidator Bernie Montgomerie to secure value in Eventscape’s biggest asset, the 7-year seating contract for the Hamilton 400 V8 Supercars street race.
Eventscape and Eventscape No 2 Ltd went into liquidation on 19 November after former Equiticorp boss Mr Hawkins’ private company, Cynotech Securities Ltd, and the NZAX-listed company he heads, Cynotech Holdings Ltd, went into a 70:30 split to take over the business through Seating Systems Ltd.
Eventscape provided about 23,000 temporary seats for the inaugural Hamilton V8 race in April. More importantly, the contract runs for the next 6 years but would have been cancelled if the company had gone into liquidation while still holding it.
Mr Montgomerie said today it would also have been pointless appointing an administrator or receiver for Eventscape because it needed more capital.
Liquidation would have jeopardised the provision of seating for its next big event as well, the LA Galaxy football match against the Oceania All Stars at Mt Smart Stadium on Saturday 6 December.
Mr Hawkins said Cynotech became involved last December, when Eventscape needed funds to import 11,000 more seats for the Supercars event. After the Hamilton 400 event, Cynotech doubled its exposure by taking over the $750,000 of funding provided by the National Bank.
“I’ve been funding them for operations since then. They ran out of steam when their ability to service any more debt was limited and there were other significant creditors. They didn’t have funds for the manufacturers who supplied them from Shanghai & Singapore. Now we have the business and the V8 seating contract.”
Mr Hawkins said he was happy to step in because it was a good business. He hoped to retain Eventscape’s 2 principals, Jason Paama & Mike Wyatt, in the new seating business which Cynotech had formed.
Hamilton 400 event director Steve Vuleta said loss of the company would have been financially disastrous for future races because the main supply alternative was much more expensive.
Cynotech took over Rocom Wireless Ltd in 2004 and sold out of all information & domestic telecommunications-related interests to focus on satellite communication and satellite phone sales & rentals, finance lending and merchant banking fee-based activities.
Cynotech bought the National Finance 2000 Ltd loan book from its receivers for $7.7 million in 2006 after the collapse of Allan Ludlow’s Payless car sales & car finance businesses, added Western Bay Finance Ltd’s remaining loan receivables to its assets and receivables totalling $5.7 million from a part of the Capital + Merchant Finance Ltd group in April this year.
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Attribution: Montgomerie & Hawkins interview, Vuleta phone interview, story written by Bob Dey for the Bob Dey Property Report.