Renaissance chairman expects company to fold

Last updated 05:00 01/02/2014

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It would be "logical" to expect Renaissance to delist from the NZX and wind up this year, company chairman Colin Giffney says.

Shareholders approved the sale of its education business, the YooBee School of Design, to Auckland-based private school operator Academic Colleges Group at a special meeting on Wednesday.

Renaissance expects to net about $13 million from the sale. But Giffney said he had received legal advice not to try to attempt to forecast how much of that Renaissance might ultimately be able to return to shareholders.

Based on its last share trade at 12.5 cents, investors are valuing the company at $5.5m.

"That $13m is not going to translate through to shareholders. There are things that might eat into it," Giffney said. "The accounts show a net working capital deficit of $1.4m. Then there are some other uncertainties."

Likely liabilities centre on the costs of exiting its remaining, loss-making YooBee retail chain, which Renaissance warned shareholders it could not bring to profitability as a listed company and which it was now trying to sell.

The chain comprises five stores which sell Apple Computer products.

Renaissance warned last month that the retail chain had had "another terrible year in 2013" and attempts to restructure it had been severely hampered by the attitude of retail malls. "We have been unable to close stores that should be closed. We have been prevented from re-letting some of the premises we have shut down. It has been an unforgiving world."

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