Veritas: ANZ forces Nosh sale or closure

Investment company Veritas has announced the potential closure of its Nosh grocery chain after pressure from its banker ANZ.

There are eight stores in the Nosh chain, mostly in Auckland, six owned by Veritas directly and two run as franchises. Veritas had been trying to franchise its six company-owned stores as part of a restructuring plan required by the bank.

This afternoon Veritas said it had agreed a revised facility with ANZ, which required it to deliver either an unconditional contract to sell the Nosh business by January 15, or a proposal to close and wind down the business.

“Given the time available before January 15, 2017, the board cannot be certain that a sale of Nosh can be agreed by that date,” it said. “The board therefore proposes to investigate the proposal to close and wind down Nosh by March 31, 2017 as part of its strategic plan for the group.”

Veritas said the sale or closure would lead to non-cash writedowns, although the amount could not be determined at this stage.

The disposal of the loss-making business would produce a lift in group earnings, it said.

Companies Office records show Makan NZ, owner of the franchised store in Constellation Drive on Auckland’s North Shore, was placed in receivership on December 6.

Makan NZ is owned by Simon and Jo Jamieson, who bought into the store in 2012 in a joint venture with the Nosh chain’s then owner Paul Lucas.

The other non Veritas-owned store is in Mt Maunganui. It is understood that the announcement will have no impact on that business as it operates only under a branding arrangement rather than a standard franchise agreement.

The store, formerly known as the Good Food Trading Company, is owned by Jo and Jamie Blennerhassett.

Veritas also owns the Mad Butcher retail franchise chain, and eight bars in Auckland and Hamilton.

At its June 30 balance date Veritas had bank debt of $33.3 million. Of that, $16.6 million was required to be repaid by June 2017 and $13.5 million by November 2017.

The company had negotiated a reduced repayment plan and has agreed that no dividends will be paid without the approval of its lender ANZ.