Kerr men appointed to PGC, Epic contract terminated

Two of George Kerr’s right hand men have been appointed to the board of Pyne Gould Corporation, in the middle of a takeover by Mr Kerr and Baker Street Capital.

PGC’s board yesterday resolved to appoint Michael Tinkler and Russell Naylor as directors.

Australia-based Mr Naylor is an executive director and investment committee member of Mr Kerr’s Torchlight Fund, and a director of ASX-listed IEF.

Mr Tinkler is the General Counsel of PGC and the trustee of the Pyne Trust, a trust associated with Mr Kerr.

PGC chairman Brian Mogridge said the two would complement the current board’s skills.

It is anticipated that Mr Naylor will chair the Audit Committee.

Mr Mogridge said an independent director would be appointed to replace Bruce Irvine, once the outcome of the takeover offer by Australasian Equity Partners Fund No 1 LP was known on March 30.

“We have suitable candidates in mind but need to understand the final percentage shareholding AEP will achieve and whether or not PGC remains listed on the NZSX”.

Meanwhile, Pyne Gould Corporation-managed Epic, a troubled infrastructure fund trying to sell assets to repay debt, has had to pay $8.8 million to terminate a management contract with another PGC subsidiary.

The exit has been triggered by a change of control clause effected by the takeover offer for PGC by AEP, the vehicle for Mr Kerr and Banker Street Capital.

Mr Kerr helped set up Epic and his Torchlight Fund has provided bridging finance to Epic at increasing interest rates.

Under the agreement Epic will pay $5.6 million to terminate its management contract with PGC’s Equity Partners Infrastructure Management (EPIM).

EPIC's board noted that a change of control of PGC would trigger pre-emptive rights by other shareholders' in Moto, one of EPIC's UK investments.

In addition to the termination payment, the PGC unit is entitled to a performance fee of $3.3 million.

The termination payments and performance fee will be satisfied by EPIC issuing ordinary shares or ordinary shares and cash.

EPIM will continue (at no cost to EPIC) to provide management services for 12 months. EPIM will also pay, or reimburse EPIC for, its legal fees with respect to this matter.

Yesterday AEP said it had received acceptances for 65% of PGC shares. The offer remains open until March 30.