NZF Group (NZF and NZF010)

[Alan3285]

I'm an interested bystander at this point.

Intriguing to note that someone has now jumped in with a bid at 10c (next best is 4.6c) but the spread is still 8c (best sell at 18c).

Still no real depth though (new bid at 10c is only $1,000).

Perhaps someone not wanting to see a trade at 4.6c given where things might go?

Alan.

[minimoke]

It looks like NZF weren't to impressed with teh 2 February Herald article. In a large para by para response NZF have clarified their position. What is very clear is that Note holders can get cash for their investment. It won't come from the company but from a sale transaction on the secondary market.

I find this somewhat disingenuous - the sale assumes there are buyers and that is not the case for NZF.

[winner69]

It looks like NZF weren't to impressed with teh 2 February Herald article. In a large para by para response NZF have clarified their position. What is very clear is that Note holders can get cash for their investment. It won't come from the company but from a sale transaction on the secondary market.

I find this somewhat disingenuous - the sale assumes there are buyers and that is not the case for NZF.

...and there will be the 'scumbags' (prob some post on sharetrader) who will bid these down to prices that actually reflect the risk .... and that won't be $ for $ will it

Instead of being 'scumbags' lets do the decent thing and and together and offer a $ for a $ .... dream on

[minimoke]

...and there will be the 'scumbags' (prob some post on sharetrader) who will bid these down to prices that actually reflect the risk .... and that won't be $ for $ will it

Instead of being 'scumbags' lets do the decent thing and and together and offer a $ for a $ .... dream on

I'd imagine there would be some NZF holders who would be pretty happy if a low ball offer turned up in the mail.

[getontoit99]

It looks like NZF weren't to impressed with teh 2 February Herald article. In a large para by para response NZF have clarified their position. What is very clear is that Note holders can get cash for their investment. It won't come from the company but from a sale transaction on the secondary market.

I find this somewhat disingenuous - the sale assumes there are buyers and that is not the case for NZF.

The NZ Herald article was full of factual errors and was subsequently extensively edited to correct them.

[QOH]

Link to another article about unhappy capital note holders .
Being one of these unhappy noteholders myself, am still leaning towards holding on to them, having gone through the ALF fiasco.
Does anyone see a revised offer coming?

http://www.stuff.co.nz/business/mark...l-note-options

As an aside does this rumour about Mike Pero going into real estate selling change anything for noteholders?

[Enumerate]

I wish people would stop being irrational about the NZF Notes - there is no automatic right to convert to cash on maturity - this is a basic fact about the instrument. It is not a pure debt instrument - it carries some of the risk levels of equity.

The fact that the company has chosen to offer a substitute Note is very interesting. They could have opted for a conversion to equity and be done with it.

This talk of the ALF like nature of the equity conversion is even more irrational nonsense. NZF at 13.8cents represents reasonable value.

Don't forget, holders who do not elect to convert might still see a cash payout (as per the Trust Deed). It will be interesting to see if the "Death Spiral" develops - in which equity converting Noteholders get NZF ords at bargain prices.

[QOH]

Don't forget, holders who do not elect to convert might still see a cash payout (as per the Trust Deed). It will be interesting to see if the "Death Spiral" develops - in which equity converting Noteholders get NZF ords at bargain prices.

When you mention "holders who do not elect to convert " are you meaning holders who accept the terms of the new notes" that they still have a chance of a cash payout, before the new notes mature or at maturity date?

[Enumerate]

When you mention "holders who do not elect to convert " are you meaning holders who accept the terms of the new notes" that they still have a chance of a cash payout, before the new notes mature or at maturity date?

Yes.

In the Trust Deed, 10 working days before the maturity date (about the 1st of March), but after the election date for the new notes (24th of February), the company can opt to payout in cash rather than convert to shares.

This is a mechanism to avoid massive "Death Spiral" dilution of existing equity holders.

The company has really laid the foundation for a "Death Spiral" by not reinforcing the value of the ordinary shares. They have actually taken steps to diminish the value of the shares by talking about NZF values in the same light as ALF values (which have collapsed and will face a reverse death spiral). The company had a choice of offering noteholders a carrot (rollover on commercial terms - 5 year bank bill swap rate + 3%) or to "use the stick" (offer OCR + 3%; scare holders with the NZF/ALF ordinary comparison).

I expected the former; we got the latter. Now things play out according to the dynamics of the "Death Spiral".

[Newman]

I tried to place an oder to buy NZF010 notes, but was rejected with a message "This instrument is currently in halt and orders are not being accepted".

The notes seem not allowed to trade on NZDX.