Plant sale, leaseback deal on track: Cavalier

LISTED carpet manufacturer Cavalier Corp says the sale and leaseback of its South Auckland manufacturing plant remains on track despite the deal not having been settled yet.

Shareholders voted in favour of the $24 million sale at a special meeting on September 17. The company needs funds to pursue a wool and natural fibre strategy and reduce debt.

Asked for an update on the process, Cavalier chief executive Paul Alston said the parties were still working through the details of the transaction and hoped to have it ‘‘all signed up and settled in the next couple of weeks.

The buyer is Kinleith Land and Infrastructure, which is owned by investment company Kinleith Continuation and directed by David Henry, the son of New Zealand First leader Winston Peters’ lawyer Brian Henry.

David Henry was in the news this week when it was revealed how another company he was involved with — New Zealand Future Forest Products (NZFFP) — failed to settle on a $126 million deal to buy woodprocessing business Claymark Group out of receivership.

Claymark was instead sold to a consortium headed by Rotorua businessman Paul Pederson for a total of $59 million.

This was not the first deal NZFFP had failed to follow through on, another one being a deal with Northlandbased North Sawn Lumber, NBR reported this week.

The Herald has contacted David Henry for comment and an update on the Cavalier transaction.

Asked if he had any concerns about Cavalier sale going ahead, Mr Alston said he was comfortable, having spoken to Kinleith on Wednesday morning.

‘‘It is happening . . . We are just working through the finer points of the leases at the moment. There are some minor code of compliance issues to work through and Kinleith is spending a lot of time and effort.’’

Kinleith had paid a deposit for the building, Mr Alston said.

‘‘There’s a bit of work to get done but we have an unconditional deal, so it’s all locked in.’’

Cavalier filed its unaudited accounts for the June financial year on September 28, which showed a net loss after tax of $21.5 million after profitability was hit by the Covid19 lockdown, particularly in April and May. — The New Zealand Herald