File photo. Photo: SIRAPHOL S./ 123rf
Pub and restaurant owner Good Spirits Hospitality (GSH) is asking shareholders to approve the sale of its assets, to head off legal action by creditors.
An annual meeting on 26 October, GSH shareholders will be asked to vote on resolutions to support the $20.7 million sale of the listed company's nine bars and restaurants in Auckland and Hamilton.
An independent committee of the board said the full price had been set for the hospitality venues and they were not discounted.
Under the proposed agreement, shareholders would receive a dividend payment of 1.04 cents per share, with the balance used to repay debt.
Once the deal was completed, GSH would have no assets and would delist from the New Zealand stock exchange.
GSH, formerly known as Veritas, was under pressure by its main lender and shareholder, Pacific Dawn, to repay dept, with the threat of a forced sale of assets hanging over the company.
"If the resolutions are not approved, the asset sale will not proceed and (Pacific Dawn) may bring enforcement action to recover its debt," GSH said in a statement to shareholders.
It also noted a forced sale of assets would not be subject to shareholder approval and would probably not result in a dividend to shareholders.
Pacific Dawn, a subsidiary of Japanese finance giant Nomura, owns just under 25 percent of the shares in GSH and is said to be in support of the sale.
GSH was badly hit by Covid closures, which resulted in losses of $5.8m in 2021 and $6.6m for last year and a sharp rise in its debt.
The proposed buyer is hospitality group Brew on Quay, which is jointly owned by current GSH chief executive Geoff Tuttle and independent director Richard Sigley.
GSH directors declined to comment.
Veritas was once the owner of the Mad Butcher franchise, but changed its name to GSH in June 2019 as part of a change in direction for the investment group.
It first listed on the NZX in March 2013, ending its first day of trading at $1.58 a share.
GSH is current trading at 2 cents a share.