NZF Group (NZF and NZF010)

[Enumerate]

Clearly NZF is being "invested in" or "taken over". (Why else would you suspend writing new loans during a due diligence).

Any ideas who the new partner is?

As an exercise - I compared the latest numbers from Dorchester (DPC) to NZF. NZF is in infinitely better shape and yet in normalised share price terms - NZF is a bargain. NZF is also multiple brands - Mike Pero mortgages is such a dominant brand and NZF owns 50% - yet there is not much market consciousness about the significance of MPM.

A new equity partner and a restructure would be a great development.

[minimoke]

Clearly NZF is being "invested in" or "taken over". (Why else would you suspend writing new loans during a due diligence).

I'm wondering if its actually a takeover. I can't figure out why you would suspend new loans if you are the one doing due diligence. It makes sense if your the one subject to due diligence. I'd have thought that a new investor would be encouraged by a growing loan book. And why would you make this statement to people on your email list and not to the market at large - unless you just want to spin a positive yarn to depositors.

Perhaps the share price is depressed because they aren't making a profit. Perhaps its because one of their Directors is up on charges. Perhaps its because their Kiwi saver fund is showing negative returns when pretty much every on else is positive: (their diversified plan is down 5.28% when the average is up 6.36%) Perhaps punters see highs of $1.60 and the are now trending consistently down to $0.14 and wondering if the bottom has indeed been reached - especially now there is no Govt Guarantee golden parachute. Perhaps its because the property market is looking pretty rocky at the moment - reduced lending on falling values)

[invessi]

Yes, they are a bargain, I think "invested in" is the likely scenario, looks like it might be a new line of bank funding for home loans and the finance company arm, once they get the liquidity ratios right for the finance company, expect to see a investment grade S&P rating! And yes, MPM has been underrated by the market, they are profitable and a great distribution chain, distribution is key!!

[Alan3285]

Hi Guys,

I have been the NZF010s for some time.

Your comments above are not specific about NZF v NZF010.

Do you see this as positive for both the shares and bonds, or are there negatives for the bonds? I can't see how, but you seem more up with the play on these than I am.

Thanks,

Alan.

[Enumerate]

Your comments above are not specific about NZF v NZF010.

Do you see this as positive for both the shares and bonds, or are there negatives for the bonds? I can't see how, but you seem more up with the play on these than I am.

It will be positive for both.

NZF shares are under pressure because of the percieved lack of capital adequacy. The basic businesses are under pressure - but are intact and recovering. (This is a near miraculous track record given what has happened to other businesses in the sector).

NZF010 are under pressure because people are fearful they will convert to shares because of the point above. These were selling in volume at 75cents per dollar face - insane (low of 50cents or so). The margin has narrowed, recently. I would love mine to convert to shares at 14.5cents per share - the noteholders would end up controlling the company. However, for this reason, I do not believe that they will convert to shares.

[POSSUM THE CAT]

Minimoke Prospectous would be Invalid in my opinion If it did not detail possible changes in ownership.

[Enumerate]

Trust Mini to make sure every silver lining has its cloud ...

BTW the final year loss is due to a write down in intangibles - MPM is not making as much money as it used to. Operations is profitable.

Huljich and HWM are probably part of the solution rather than part of the problem.

The punters don't seem keen to sell any - the liquidity over the past year has been minimal. There does not seem to be any evidence for a rush to the door.

The government guarantee never applied to the ordinary shares.

[minimoke]

Trust Mini to make sure every silver lining has its cloud ...

Apologies for that - I guess I tend to see the cloud when thats self obvious. Distinguishing diminishing storm clouds from a smoke screen is often the challenge.

BTW the final year loss is due to a write down in intangibles - MPM is not making as much money as it used to. Operations is profitable.

?? Finance Div -= $1.7m loss, Home Loans 1.7m profit, Finance $0.18 profit, Consumer finance $0.16m loss, management 1.1m loss. Operations actually made a $818,000 interim loss compared with a $2m profit for the previous period.

The punters don't seem keen to sell any - the liquidity over the past year has been minimal. There does not seem to be any evidence for a rush to the door.

There have never been too many punters wanting to buy either. Its a good day if there are more than a couple of buy bids.

The government guarantee never applied to the ordinary shares.

Thats a given. But during the guarantee depositors could support the share price knowing they would get their cash back. We only need to look at SCF to see how a company was artificially propped up. All credit to NZF - at least they are standing on their own two feet.

[invessi]

NZF
26/01/2011 16:45
GENERAL

REL: 1645 HRS NZF Group Limited

GENERAL: NZF: NZF Group Ltd Announces Maturity options on Capital Notes

NZF
26/01/11
CAPITAL NOTES (NZF010)

NZF Group Limited (NZF) Announces Maturity options on Capital Notes (NZF010).

Letters have been sent to all NZF Capital Noteholders on the register today
for NZF010 Capital Notes that mature on 15/03/2011.

The letter includes an Election Notice, in terms of the Trust Deed
establishing the Capital Notes ("Trust Deed"), and confirms that:

- NZF has elected to provide Noteholders, with the option to renew all of
their Capital Notes on the terms specified in the Election Notice ("Renewal
Option");

- If they do not elect to accept the Renewal Option, then NZF has elected
that it will, on the Maturity Date, compulsorily redeem all of their Capital
Notes by issuing new ordinary shares in NZF in accordance with the terms of
the Trust Deed;

- NZF has elected to not redeem the Capital Notes for cash on the Maturity
Dat
e..

The covering letter, Frequently Asked Questions and Election Notice are
attached.

Capital Noteholders that wish to exercise the "Renewal Option" must complete
and return Election Notices to reach the Registrar (Link Market Services) by
24 February 2011.

Malcolm Lindeque
For and on behalf of the board of directors
Company Secretary

ENDS
End CA:00204900 For:NZF Type:GENERAL Time:2011-01-26 16:45:21

[minimoke]

So, do we read into that there is no cash and they are looking at a dilution of head shares?