IRG looks for $500,000 in capital

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Investment Research Group (IRG), the firm which bought Phillip King's Tauranga-based financial planning business Ellerie Cornwall, is battling with breaches of its banking covenants and needing to raise half a million dollars in extra capital.

Thursday, August 6th 2009, 4:58AM 2 Comments

by Sonia Speedy

IRG told the NZX it needs around $500,000 of extra capital to remedy the breach of its shareholders funds covenant, but that it is trading profitably and not in breach of its interest cover ratio in the current financial year.

Its bankers advised it was in breach of its banking covenants around shareholders funds and interest cover after discussions on its company accounts for the year to March 31, 2009.

Meanwhile NZX has told the company off for not filing its annual report on time. It said if the accounts were not filed by Monday, trading in IRG's securities would be suspended.

IRG says the situation is largely due to write-downs in the last financial year, since which it had raised additional capital and sold assets. It added that it is "actively reviewing" its options for raising the capital it needs and that its bankers do not propose taking any action at this point.

The company had planned to expand its advisory business, however earlier this year it sold its Auckland-based funds management and advisory business to Macrocarpa Holdings, a subsidiary of The Business Bakery for $500,000.  This business is now operating as Foundry Asset Management. The main adviser with the firm is Stephen Rogers.

That has left IRG with a publishing business, a transactional advisory firm which incorporates the former Equity Investment Advisors and MoneyOnline businesses; and IRG BOP- King's advisory business.

Further announcements made by IRG to NZX this week show that Angela and Mark Wheeler have acquired a 10% shareholding in IRG. Mark Wheeler was appointed to the IRG board in June.

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