Torchlight's owner disputes size of debt

TIM HUNTER
Last updated 05:00 14/06/2014

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A "rich man's argument about fees", involving media-shy Australian multimillionaire John Grill and Kiwi businessman George Kerr, has burst into the open.

Receivers acting for Grill's company, Wilaci, say it is owed "a significant amount of money" by Torchlight Fund No 1, a limited partnership related to Pyne Gould Corporation, majority owned and controlled by Kerr.

The Torchlight entity was placed in receivership on June 10 by Wilaci. Receiver William Black of McGrath Nicol said the move was "as a result of an event of default" on a loan from Wilaci to Torchlight.

Black said he had requested information from a significant number of parties.

"We are analysing the position and the assets of the fund," he said.

The stock exchange halted trading in Pyne Gould Corporation shares for about an hour on Thursday after a media report said PGC's Torchlight Fund was in receivership.

PGC said that although Torchlight Fund No 1 was in receivership, this was a shell that no longer held assets of the Torchlight Fund.

"The receivership is being challenged and likely to be subject of commercial litigation," PGC said. "It relates to a dispute over a loan where the principal has been fully repaid but the parties cannot agree on the amount and timing of any residual payments."

Kerr told BusinessDay the loan was made to the New Zealand limited partnership prior to a restructuring in 2012 in which the fund moved to the Cayman Islands.

The principal loan of $37 million had been entirely repaid, he said, but there was a disagreement on other amounts owing.

"We think it's a low number, he thinks it's a high number," Kerr said. "The courts will tell us what's right."

Grill had put the Torchlight entity into receivership to protect his interests, Kerr said.

"It'll be a long and technical commercial litigation that has no impact on PGC or on Torchlight Fund," he said.

"It's a rich man's argument about fees."

Grill is known in Australia as the founder and former chief executive of engineering giant WorleyParsons.

PGC's investment in Torchlight, which owns hotels and entertainment, property and media assets in Australia and Britain, is valued at about $56m.

The company is in the process of transferring its listing to the London Stock Exchange and shifted its registration to Guernsey last year.

Kerr said he expected to list on the London exchange by the end of the year. 

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