Bath Street Capital will 'robustly defend' Pyne Gould's $22m claim, considering counterclaim
Bath Street Capital, which has been building a local trustee firm, will "robustly defend" a $22 million claim by Pyne Gould Corp [NZX: PGC] over the sale of Perpetual Trust, and is considering filing a counter-suit against the asset manager.
The company acknowledged Pyne Gould's statement to the NZX yesterday that High Court proceedings had started but was yet to receive a statement of claim from the Guernsey-based asset manager, Bath Street said in a statement. The firms are locked in a dispute over whether Bath Street owes $22 million, plus interest and costs, for the sale of Perpetual.
The trustee owner said the payment would only have been triggered if shares in a subsidiary firm were listed on the main board of the NZX, and that the price payable wasn't fixed. Rather it would be as much as $22 million depending on the price to earnings multiple at the time of listing. The deal didn't set a deadline for the listing to occur, Bath Street said.
Bath Street director Andrew Barnes, who Pyne Gould also named as facing the proceedings, said the action was "purely opportunistic."
"We will robustly defend this matter, and look forward to presenting our case in court," Mr Barnes said. "We have our own issues in relation to PGC's recent conduct and we are looking closely at potential counterclaims with our lawyers."
Separately, Pyne Gould yesterday said the release of its 2015 annual report would be delayed due to a slow handover to its new auditor, and trading in the stock faces a second suspension in as many years for missing the deadline.
In February, the Financial Markets Authority said it was reviewing PGC's 2014 annual report over the inclusion of the $22 million gain from the sale of its Perpetual Trust unit. A spokeswoman for the FMA today said the market regulator was no longer looking at the company's 2014 report but was "engaging with PGC regarding its 2015 financial reporting and we are waiting to see the 2015 annual report, once released."
Bath Street's Barnes said the court hearing will also let his firm "move past the significant uncertainty and reputational damage caused by PGC's accounting for this highly disputed amount in its 2014 accounts and various related market pronouncements."
Shares of Pyne Gould last traded at 24c, valuing the firm at $49.8 million.