Gresham seeks buyer for New Zealand's Noel Leeming Group

According to Stuff.Co.NZ, lenders refused to roll over loans to Noel Leeming unless it was put up for sale. The company rolled over NZ$74.7 million ($59.5 million) in loans from the Bank of Scotland International, which were due at the end of June.

Noel Leeming's CEO Bruce Cotterill said that Gresham would have likely exited the asset if the economy were more condusive to a sale. "What they're saying quite rightly as a shareholder is, `If we're still sitting here at 10 years, we've probably held it for too long, so what are our options?' But there's nothing to suggest the business has been thrown on the market and nothing to suggest it's at the behest of bankers," he said.

Noel Leeming Group is the holder of Noel Leeming and Bond & Bond, which offer branded consumer appliances as well as computer and electronics products across 80 branches. The company has been hit by economic volatility in recent years, reporting a loss of NZ$4.4 million in 2009, and a NZ$2.7 million loss on revenue of NZ$515.8 million for the fiscal year ending March 2010. Noel Leeming has yet to release its full 2011 results, though it reported an 8% increase in sales in the six months to September.

Gresham's Private Equity Fund II acquired the asset in August 2004, through a NZ$138.5 million management buyout from a group owned by Eric Watson, who also owns the Warriors rugby league club. Gresham is said to have invested a further NZ$15 million into Noel Leeming after the company breached its banking covenants in April 2008.

The company's difficulties are familiar to a number of players in Australasia's consumer and retail space. REDGroup Retail, previously owned by Pacific Equity Partners (PEP), was taken into receivership in February. Administrator Ferrier Hodgson was able to salvage a portion of the bookseller's business, Angus & Robertson, by selling a number of its franchises to Australian book chain Collins Booksellers in July. Its Borders business could not be sold.

Ferrier Hodgson also resurrected Australian clothing retailer Colorado Group, formerly part of Affinity Equity Partners' portfolio, as Fusion Retail . The rebranded company emerged from receivership with A$70 million (then $68.7 million) in capital, helped by a number of its bankers opting to transfer its debt holdings into equity.

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• Topics
• Australasia
• Exits
• Credit/Special Situations
• Consumer
• New Zealand
• Gresham Private Equity
• Exit
• Distressed
• Consumer