Renaissance directors have unanimously supported the proposal to appoint a liquidator as the struggling company tries to return capital to shareholders.
“Today's resolution to liquidate Renaissance has been a long time coming,” wrote chairman of the meeting Richard Ebbet via the New Zealand stock exchange.
As revealed at the company’s Special General Meeting on January 29 of this year, shareholders voted to sell Renaissance’s principal operating business, the Yoobee School of Design.
Stated at that time that 'once sold, there will be little left of value in Renaissance’, in February the company also sold the Yoobee retail business after more than 12 months of trying.
After then interviewing potential Liquidators in March, at the Annual General Meeting on April 11, the Board advised shareholders that Renaissance had net assets of $7.2m, and that the Board's preference 'assuming no compelling alternative is presented' was to proceed to a liquidation of Renaissance.
According to Ebbet’s statement, this protracted timeframe is the result of the Board seeking to resolve all the outstanding issues that it can before liquidation in order to maximise the position for shareholders.
“Getting urgency into negotiations to extricate ourselves from contractual commitments has not been easy,” Ebbet states.
“However we feel that we have taken the process as far as we can and any outstanding issues will be more effectively handled under liquidation.
“The last decision for the Board to make was whether there were any more attractive alternatives to put before shareholders, such as the sale of the cashed up shell of Renaissance.
“Our Chairman spoke to this at some length at the AGM, expressing his view that shareholders of back door listing vehicles were usually short changed.
“Nonetheless the situation of Renaissance has been well known in the market since January of this year, and the Board has publicly stated that it would entertain any proposals.”
According to Ebbet, there were four approaches in total but none of the approaches “matured into proposals” and they
did not change the company’s view that the best outcome was to return cash to shareholders.
Ebbet also claims there has been no material change to the financial position of Renaissance as set out in the notice of meeting although the liabilities have been further reduced (and uncertainty removed) as settlements have been reached.
Accordingly, shareholders can expect to receive tax-free distributions totalling, approximately the net asset figure of 16.6 cents per share
The distributions will be solely in the hands of the Liquidators but are likely to be by way of an interim distribution of 13 cents per share to be paid within 6 weeks of the appointment of the liquidators, and a further distribution of the balance once the liquidation is finalised.
“The directors unanimously support the proposal to appoint a liquidator as, based on all advice taken, it provides the most economical and efficient way of returning capital to shareholders,” Ebbet adds.