Witt on way to being debt-free

18:43, Mar 19 2014

Witt is on its way to financial freedom after it settled its last part of a suspensory loan of $2.5 million.

The equity conversion notice for the 2013 suspensory loan conversion of $2.5m was approved at its council meeting yesterday.

Witt's chief financial officer Peter Rothwell said it was good news for the institution after spending the last few years paying its Crown debts.

Witt ran up $18m in Crown debt as a result of several bail-outs over the years. In 2008, the Labour government had promised to clear Witt of the outstanding amount.

However, the write-off was deemed infeasible by the National party when it came into power.

In its place, a conversion agreement was drawn up which turned the debt into a suspensory loan and it meant the amount owed would not be wiped away in one lump sum as previously agreed.

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Debt repayments were instead split into two groups.

The Government would wipe out $2.5m of debt each year for five years from 2009, providing Witt met certain key performance indicators. The remaining $5m would be interest free and repayable over five years from 2020.

Taking in the assumption that the 2013 suspensory loan had taken place, it would see Witt's equity increase to $29.590m, Mr Rothwell said in a report.

Both group equity and parents equity remained at $29.75m and $26.9m respectively.

Witt's student debt to date sits at $1.66m compared with $1.56m in the same time last year.

Mr Rothwell said it was due to first semester enrolments and the subsequent timing of StudyLink payments.

Witt also sold all of its 1650 shares it bought from PINZ, an international project management and consulting firm, to Wintec.

The shares were first bought in 1994 by Witt at $10 per share and the investment was recorded at cost in Witt's financial statements, which was $16,500.

Witt will make a "modest profit" of $15,000 if it receives the full sale price from Wintec.

Taranaki Daily News