Bondholder letter Proposed Sale of Speirs Finance Business
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Speirs Group Limited (SGL) | 11:26 am, Wednesday 23 July 2008 | SGL | 0.550 |
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23 July 2008
Dear []
Proposed Sale of Speirs Finance Business
Speirs Group Limited ( Speirs Group) values the trust and support that you
and many thousands of investors have for more than forty years extended to
our finance business, Speirs Finance. We have advised the New Zealand Stock
Exchange that Speirs Group has entered into a conditional agreement to
separate Speirs Finance into a stand-alone company and sell it to Allied
Farmers
Limited ( Allied Farmers).
The Directors of Speirs Group believe that in todays changing economy the
interests of our investors will be best advanced and protected in a finance
business that has greater scale and a
broader degree of penetration in both borrowing and lending markets than
Speirs Finance does today. The need for greater scale and improved market
penetration arises from the fact that the New Zealand finance sector is
currently consolidating into a smaller number of larger and more competitive
businesses.
We wish to ensure that you have a clear and full understanding of the
implications of the conditional agreement we have reached with Allied Farmers
to purchase the finance business, and
of your rights and important role in the processes by which this transaction
will be progressed.
To effect the proposed transaction, a resolution to separate the Speirs
Finance division into a self- contained limited liability company owned by
Speirs Group must be approved by an appropriate
majority of Speirs Group Debt Obligation holders at a special meeting called
for this purpose.
The company will shortly be sending you a formal notice of that meeting
together with an information pack outlining the implications of the
transaction for you and other debt obligation
holders.
Resolutions will also need to be approved by the shareholders of Speirs
Group, including a resolution seeking approval to sell Speirs Finance to
Allied Farmers.
I am writing to assure you that Speirs Group directors have formed the view
that your position as a Speirs Debt Obligation holder will be enhanced as a
result of this transaction. We are
determined to ensure that the obligations the Company has to you will be
honoured and all your current rights will be preserved at all stages of the
transaction, including the formation of Speirs
Finance Limited as a stand-alone company, during its transfer to new owners,
and following the completion of the transaction.
Level 3, FMG House, 55 The Square, PO Box 400, Palmerston North, New Zealand,
Freephone 0800 65 45 45, Fax 06 350 6020
Website www.speirs.co.nz, Email investments@speirs.co.nz
The Directors have carefully negotiated the conditional agreement with Allied
Farmers. Allied Farmers is listed on NZX, has widespread business activities
throughout New Zealand with
particular emphasis on servicing the needs of the dairy and other farming
interests nationwide.
Its finance subsidiary, Allied Nationwide Finance Limited, is a diversified
finance company providing commercial, rural and property finance throughout
New Zealand. However, its lending
policies and business focus are similar to those applied by Speirs Finance.
Further details of the background to the proposed transaction are set out in
the attached announcement. Please take the time to read this announcement.
In short, there is a strong compatibility between the two finance businesses
and each one will bring new strengths to the other through a transaction that
would bring their operations together
in a larger, better spread, and more competitive business.
For these reasons, we are initiating the process of seeking the approval from
an appropriate majority of debt obligation holders required to progress the
transaction.
We will provide you with more detailed information on the manner in which
your interests will be safeguarded throughout and after the Speirs Finance
separation and sale transaction when we
send you formal notification of the special meeting of debt obligation
holders.
Our objective, and that of Allied Farmers, is to complete a seamless sale
with minimum impact upon all Speirs Group investors. We at Speirs Group hope
you will continue your investment relationship with the new owners of Speirs
Finance.
Your direct relationships will continue in the future to be with our
Palmerston North office and you will be dealing with the same personnel. As
part of the transaction Speirs Group will take a shareholding position in
Allied Farmers and Nelson Speirs will assume a directorate role in the
enlarged finance company. From your perspective it will be business as usual
.
In the meantime, if you have questions or wish information specific to your
own situation as a debt obligation holder with Speirs Group, please do not
hesitate to contact me DD 06 350 6003 or email nelsons@speirs.co.nz or
contact our funding staff at our Palmerston North office.
We at Speirs Group see this as an exciting proposal and another step in the
development of our finance business.
I thank you for your continuing support and consideration.
Yours sincerely
Nelson Speirs
Chairman.
PS We also enclose with this letter the Annual Report and Accounts for the
Group for the year ended 31 March 2008, together with the notice of the
up-coming Annual General Meeting of
Shareholders. As a Bondholder, you are cordially invited to attend that
meeting. The Annual report contains a full report from the directors
covering the performance of the company in the
past financial year a year of unprecedented change within the finance
industry in New Zealand.