Bridgecorp Holdings
Registered Office Address
Level 14
Bridgecorp House
36 Kitchener Street
Auckland
Directors
DAVIDSON, Bruce Nelson
MARTIN, Allister Millar
PETRICEVIC, Rod
KINGSTON, R.
Background
Incorporated: 02-OCT-1980
Bridgecorp Holdings Ltd ("Bridgecorp") was originally incorporated as Bridgevale
Mining Ltd and operated as a listed mining company.
On 25 November 1986 the company was rename Bridgecorp Holdings Ltd and, as a
result of a change in the control of the major shareholding, changed its
business to that of an investment company. The main acquisition which Bridgecorp
then made was the purchase of a 56% interest in Toy Warehouse Holdings Ltd. This
investment performed badly in the years following the 1987 crash and in 1991 was
disposed of at a loss that resulted in the complete erosion of Vridgecorp's
asset base. Bridgecorp was unable to operate properly with no assets and as a
result was delisted from the New Zealand Stock Exchange in 1992.
In 1993 interests associated with Mr R.M. Petricevic acquired the major
shareholding of Bridgecorp, with a view to restructuring it into a financial
services company.
In February 1994 the shareholders agreed to a capital restructuring of
Bridgecorpand to the acquisition of two subsidiary companies that owned an
existing portfolio of mortgges in exchange for the issue of shares. This
acquisition enlarged Bridgecorp's capital and asset base with no cash outlay and
gave some ongoing cashflow.
On 30 June 1995 Bridgecorp completed an issue of 2,147,800 12.5% convertible
notes and raised net funds of $2,147,800, which allowed further expansion of its
activities. In 1996 Bridgecorp issued an additional 355,600 convertible notes to
raise an additional $355,600, (of these 205,600 were 8.5% convertible notes).
On 10 September 1996 Bridgecorp issued a secured debenture stock prospectus and
at the expiration of the prospectus Bridgecorp had raised $2,175,908.
On 8 December 1997 Bridgecorp made a rights issue to ordinary shareholders and
convertible noteholders for an issue of 5,937,000 convertible notes of $1.00
each with a maturity date of 31 March 1999 in the ration of 1 for 7. The
directors reserved the right to place any securities not applied for by the
ordinary shareholders and convertible noteholders either in satisfying the
requirements of the existing convertible noteholders in redeeming their existing
convertible notes and applying for new convertible notes or placing new
convertible notes to other parties. This offer resulted in the issue of
3,370,500 new convertible notes with a maturity date of 31 March 1999.
On 15 December 1997 Bridgecorp issued the second secured debenture stock
prospectus and at the expiration of the prospectus the secured debenture stock
issued under that and the previous prospectus stood at $5,658,456.
On 7 August 1998 Bridgecorp issued a third secured debenture stock prospectus
and as at the expiration of the prospectus the secured debenture stock issued
under that and the previous prospectuses stood at $32,777,150.
On 31 March 1999 3,134,800 convertible notes were converted to 15,674,000 fuly
paid ordinary shares.
On 2 August 1999 Bridgecorp issued a forth secured debenture stock prospectus
and as at 31 March 2000 the secured debenture stock issed under that and the
previous prospectuses stood at $52,938,420.
On 9 December 1999 Bridgecorp issued a prospectus for unsecured notes (periodic-
ally adjusted rate securities) and as at the expiration of that prospectus the
unsecured notes issued stood at $4,649,600.
On 18 July 2000 Bridgecorp isued a fifth secured debenture stock prospectus and
as at 30 September 2000 the secured debenture stock issued under that and the
previous prospectuses stood at $103,301,700.
On or about 20 October 2000, Bridgecorp received a cover note confirming that
it had entered into a mortgage indemnity insurance agreement with a syndicate of
Lloyd's underwriters whereby the Lloyd's syndicate agreed to indemnify
Bridgecorp up to a maximum aggregate amount of $20 million against losses
suffered by Bridgecorp on mortgage loans granted during the period of cover (23
August 2000 to 25 August 2001). The policy indemnifies Bridgecorp for the loss
of principal and recovery expenses (but not for lost interest) on defaulting
mortgage loans which are covered under the policy provided that the maximum
reimbursement on any one mortgage is not to exceed 75% of the principal amount
or $2 million, whichever is the lesser. As at 31 October 2000, approxiamtely
$15,000,000 of mortgage loans was indemnified by the policy.
Bridgecorp employs around 18 people.
Major Shareholders
Website
www.bridgecorp.co.nz
News
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16.11.2001 - NZUM
Bridgecorp Holdings announced a profit of $5.5 million (after tax) for the half-year to
September 30.
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Thursday, October 18, 2001 - Email from Broker
Bridgecorp Holdings Limited have recently successfully completed the placement of $15 million
worth of Capital Notes.
There is currently a limited amount of Capital Notes available for investors to purchase on
the secondary market. The initial Election Date is 30 September 2004, paying interest of
12.00%
STRUCTURE OF THE OFFER
Issuer: Bridgecorp Holdings Limited
Election Date: 30 September 2004
Interest Rate: 12.00% payable quarterly
Interest Payment Dates: 31 March, 30 June, 30 September & 31 December
MINIMUM APPLICATION
Applications must be made for a minimum of $5,000 then in multiples of $1,000
THE INVESTMENT INSTRUMENT
The Capital Notes are fixed interest unsecured subordinated debt obligations of Bridgecorp
Holdings Limited
MATURITY / ELECTION DATE
On the initial Election Date of 30 September 2004, investors will have the choice of rolling-
over the investment into a similar product, or electing to convert the investment into shares
in Bridgecorp Holdings Ltd. Bridgecorp then have the option of paying cash or issuing shares.
In recognition of the fact that most investors prefer cash to the possibility of shares,
Bridgecorp have instituted strong incentives for them to pay cash to investors.
These incentives include:
- Bridgecorp Capital Notes are structureed with shares being issued at 10% discount to market
value. This is a healthy incentive for Bridgecorp to pay out investors in cash.
- Where Bridgecorp is unlisted a put opttion allowing investors to force Bridgecorp to
purchase the shares issued at $1 per Capital Note.
- Where there is a thin market in the shhares Noteholders are protected by a trustee facility
ensuring noteholders receive at least $1 per Note.
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Friday 22nd June 2001 - NBR Personal Investor, by Deborah Hill Cone
The Stock Exchange has defended its handling of two listing applications by niche financier
Bridgecorp - although the company yesterday maintained it was rebuffed without reasons.
NBR understands a confidential document commissioned by an independent consultant was
central to the considerations of the NZSE in the later listing bid in February 2000.
The Stock Exchange would not discuss that so-called report although Stock Exchange chairman
Simon Allen said he could confirm "documents" were supplied by finance company Bridgecorp
during the process of application and that correspondence was exchanged.
He could not comment on the nature or details of the documents which he said were kept
confidential at the request of Bridgecorp.
Mr Petricevic earlier supplied to NBR a letter backing up his claim that he had not been
given reasons for being turned down - but the information applied only to the company's
first application.
The letter from June 1999 sent to Stuart Wilson at DF Mainland Securities, the organising
broker used by Bridgecorp, said the NZSE board had declined the company's application.
"Consistently [sic] with Rule 5.3.1 of the Listing Rules, the exchange does not propose to
give reasons for its decision," NZSE legal officer Tanya Irving wrote.
Mr Allen said the rules governing listing were for sounds reasons such as investor
protection and the need to set standards.
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Friday 15th June 2001 - NBR Personal Investor, by Deborah Hill Cone
The Stock Exchange was yesterday hiding behind listing rules and refusing to release details
about why it has twice turned down applications to list from profitable niche finance
company Bridgecorp.
The information blackout comes as pressure builds for the exchange to move away from what is
perceived as an arrogant "old boy's club" culture and be more open in the post-Takeovers
Code era.
But flying in the face of its "glasnost" policy, the NZSE is clinging to its right to turn
down a company because it does not like the cut of the gib of its directors - without
explaining why.
Bridgecorp, a short-term loan specialist 54% owned by Rod Petricevic, applied in 1999 and
2000 to list but has now given up on the plan.
Mr Petricevic made - and lost - a fortune in the 1980s with his merchant bank Euro-National
Corporation. It reported a massive loss of $215 million in 1988 but the company did not
collapse and later became part of what is now listed as CDL Hotels.
Mr Petricevic said he did not understand why people harked back to what happened in 1987.
"We could have served two sentences for murder since then, with no parole ... Isn't it about
performance?"
University of Canterbury senior accountancy lecturer Alan Robb said Bridgecorp's 2001
accounts looked as complete as one would expect from a good reporting organisation.
Mr Robb said he could see no obvious reason to turn down Bridgecorp's application on the
basis of its accounts and questioned why the NZSE would not disclose its reasoning.
"It seems against natural justice that they do not say why," Mr Robb said.
Auditors Grant Thornton also gave the accounts an unqualified thumbs-up.
Bridgecorp was happy to answer queries on several items Mr Robb raised, including why it
capitalised $11.9 million in fees and interest in its statement of cashflows and why it was
paying almost $1 million in "other directors'" fees.
NZSE managing director Bill Foster would not say whether problems with the company's
accounts were behind its rejection of Bridgecorp.
He refused to discuss the company's applications, explain the decisions or even identify the
members of the listing sub-committee who considered them.
"We can turn them down without giving any reasons," he said.
Bridgecorp is now expanding into Australia after being given the cold shoulder by the NZSE.
A capital notes offering made last year - a fallback after being rebuffed by the exchange -
was oversubscribed, raising $18 million rather than the target of $10 million.
"We will set up a lookalike Bridgecorp organisation in Australia ... ASX listing is an
option, " Mr Petricevic said.
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Friday 15th June 2001 - NBR Personal Investor, by Deborah Hill Cone
Fast-growing finance company Bridgecorp revealed yesterday it would complete a trust deed
and prospectus in Australia by the end of the month.
The niche loans specialist reported an after-tax profit of $6.8 million for the year to
March, almost double the previous year - and now plans a $50 million capital raising across
the Tasman.
While some in the property industry struggled with high-profile collapses, defaults and a
flat market, Bridgecorp thrived on it - boosting its revenue from $19 million in 2000 to
$39.9 million this year.
"We tend to reverse the cycle - when times are tougher it has been better for us,"
Bridgecorp managing director Rod Petricevic said.
Bridgecorp provides bridging finance and short term loans to the property industry, with
practically all of the loans secured against real estate.
It has a wide range of clients including individuals such as apartment buyers but is known
to help out developers who have run out of cash at the end of a project and need a short-
term loan.
Mr Petricevic is comfortable sticking to property: "Half the world's wealth is in real
estate," he says, quoting Warren Buffett - "We're happy with bricks and mortar as security."
While Bridgecorp is well known in property circles it has kept a low profile in the
mainstream business community, partly because Mr Petricevic rarely gives media interviews.
He became frustrated that any attention the company received was overshadowed by a rehash of
his past. He was part of Bruce Judge's 1980s clique - inevitably referred to as high fliers,
although he hates that term - who crashed down to earth after the sharemarket crash.
Mr Petricevic's 1980s company Euro-National Corporation, made huge losses but never
collapsed - what was Euro-National is now part of CDL Hotels.
Less of a risk-taker these days Mr Petricevic emphasises how Bridgecorp conservatively
manages its risk with an average loan of only $650,000 on terms of less than eight months
and the fact that half of the loan book is now insured by Lloyd's.
Bridgecorp is also moving away from its role as a developer - one of its current projects is
building a 75-apartment development in Kelston - but development is not its focus: "We're
principally a money lender," Mr Petricevic said.
Bridgecorp's shares are traded on the secondary market - but not often with the scrip
closely held.
Mr Petricevic owns 54% of the company. Fifteen hundred shareholders each own fewer than 500
shares, below the level required to be considered a minimum parcel.
The company plans to buy back some of the smaller share parcels or bring their shares up to
a minimum parcel as it does not make sense to have so many small shareholders.
"Issuing a dividend cheque for 6c is expensive - the administration costs are very high."
There are 40 million shares trading on the secondary market at about 55-65c per share,
giving the company a market capitalisation of only $20 million.
"We're seeing our company into this marketplace at one third to one half of its real value
... Australia is a more international marketplace."
Bridgecorp is now expanding into Australia after being given the cold shoulder by the New
Zealand Stock Exchange.
A capital notes offering made last year - a fallback after being rebuffed by the NZSE - was
oversubscribed, raising $18 million rather than the target of $10 million.
"[Capital notes] look and feel like debt to an investor but actually add to shareholder
funds," Mr Petricevic said.
Now Bridgecorp is planning to do the same in Australia. The trust deed and prospectus should
be finished by the end of June.
"We will set up a lookalike Bridgecorp organisation in Australia ... ASX listing is an
option. I always said we would list - and ideally do it on the NZSE - we may still do it."
Bridgecorp financial controller Robert Roest defended the company's decision to capitalise
$11.9 million in fees and interest in its statement of cashflows - essentially treating the
sum as an asset, not an expense.
He said the treatment reflected the nature of the company's business where fees were often
not paid until the loan was repaid and so could not be recognised as operating cash flow.
The company could get around that by lending the borrower more to cover the fees, which they
would then hand back to the company and it was increasingly doing so.
Mr Roest also defended the high figure for "other directors' remuneration" - $994,000 -
compared with $492,000 the previous year.
Mr Roest said that figure accounted for managing director Mr Petricevic's $200,000 base
salary and his performance-based payments.
The performance-based component was tied to the company's profit. "If the company didn't
perform he would get $200,000," Mr Roest said.
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Thursday, 12 April, 2001 - Press Release
Bridgecorp notes issue closes over-subscribed
A $10 million capital notes issue from Auckland financier and investment banker Bridgecorp
Holdings Limited has been closed over-subscribed at $19.5 million.
The pre-Christmas issue was made in two equal tranches of $5 million, one with an initial
term maturing in October 2002 and the second maturing in December 2003. Provision was made
for over-subscriptions of $5 million in each tranche.
Managing director, Rod Petricevic said the support from investors nationwide was extremely
heartening. The additional capital raised by the issue would enable Bridgecorp to further
grow its finance book, he said. The company now has assets in excess of $200 million.
Following last October's agreement with Lloyds of London for insurance cover of Bridgecorp's
new mortgages, a large percentage of the mortgage book was now covered with the total book
expected to be covered by August.
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Wednesday, 28 March, 2001 - Press Release
Bridgecorp sets up safety net for sub-contractors
Auckland financier and investment banker Bridgecorp holdings has made special provisions to
financially protect sub-contractors on its developments as a result of the collapse of
Hartner Construction Ltd.
Bridgecorp managing director, Mr Rodney Petricevic, said in future, all payments to
sub-contractors on their West Auckland apartment project will be paid directly from a special
National Bank account within seven days of certification by the project's quantity surveyors.
"In addition, all retentions will be held in a bank trust account and will be paid directly
to sub-contractors as and when they fall due."
Mr Petricevic said these arrangements will enable sub-contractors to be paid independent of
the main contractor and will avoid the debacle caused by the Hartner collapse.
Bridgecorp subsidiary, Goodman Properties is the developer of the Westward Park project and
Hartner Construction was the main contractor.
"We have been saddened by the impact on the sub-contractors and while we contacted them all
and offered them the chance to assist with the completion of the project, many were unable to
do so," Mr Petricevic said.
The Westward Park project is now underway again with new contracts let where necessary. The
site is expected to be operating at full capacity within a week.
Issued by:
Mr Rodney Petricevic
Managing Director
Tel: (09) 307-6789 or C/- (025) 428-217
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Monday, November 20, 2000 - NBR Briefs
Auckland financier and investment banker Bridgecorp Holdings is going to the market for $10
million of capital notes. Managing director Rod Petricevic said the capital will allow
Bridgecorp to grow its finance book, currently in excess of $100 million. Its lending is
targeted to short term bridging and project finance markets.
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