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Torchlight pays out Perpetual loan, plus $6m fee

BUSINESSDESK: Torchlight Fund No 1 LP, an entity managed by Pyne Gould boss George Kerr, has made the last $3.5 million repayment of a loan that raised the ire of the market watchdog.

The payment of the loan from Pyne Gould's Perpetual Cash Management Fund means the $28 million facility has been fully-repaid before the end of July, as previously indicated. The fund also paid $6 million in accrued management fees to Pyne Gould subsidiary Torchlight (GP) 1, the company said.

Today's payment comes after last week's $9 million repayment, which was funded from the ongoing sale of real estate assets.

Earlier this month the High Court ordered the cash management fund be subject to two independent observers ahead of a substantive court hearing next month.

The order was made after statutory supervisor Trustees Executors passed on concerns about the related party loans to the Financial Markets Authority.

Perpetual Trust disputed the FMA's interpretation of the loan, but asked Torchlight to repay the facility ahead of schedule.

A sister fund managed by Perpetual was frozen after a surge in redemption requests after the details of the Torchlight loan emerged.

Last week Pyne Gould exited its stake in Heartland New Zealand and sold down most of its investment in PGG Wrightson to repay $22 million in bank debt.

The shares were unchanged at 25 cents apiece, about two-thirds of the 37 cents-a-share takeover bid made by Kerr and US hedge fund Baker Street Capital via Australasian Equity Partners No 1 LP.
 

Comments and questions
4

Just because the money has been repaid doesn't exonerate George Kerr or Torchlight.

The $6m management fee looks somewhat out of kilter with the size of the assignment!!!! But in line with George's history and the Macquarrie Bank model he seems to follow - could be viewed as greedy

The dodgy one owns majority of PGC which owns Torchlight which manages Torchlight fund in which the dodgy one and PGC both put in $15m each to 'kick-start' and entice other investors into the fund.

Try making sense of that! New independent director, the dodgy one's good mate Greg 'Not' Bright may like to enlighten us on the accounting treatment of the $6m fee?

"D O D G Y "
Right on !

You can have some fun here.... http://pgcnz.blogspot.co.nz/ - some times the media can brush away a problem, or make a problem , depending on the stance they take- Justice huh? what? Kerr has mates in high places..... FMA went to great lengths to try and keep investigations etc confidential didn't they? why?