NZ Auto cuts funding from bank over boardroom changes

NZ Automotive Investments (NZAI), the parent company of 2 Cheap Cars, is planning to cut funding from its bank due to changes in its management and leadership.

It will no longer be able to provide further monetary support for its trade and motor finance facilities after the current expiry dates.

Speaking with NZ Herald, the company said the decision relates to recent changes in company leadership and governance, not the position of the business itself.

Three non-executive directors of the company resigned last month, including Charles Bolt, Tim Cook, Tracy Roswell and Eugene Williams who owns 34.3 per cent of NZAI.

The trade finance facility of the company funds the purchase of imported vehicles under a limit of $8 million. This facility will mature as of 31 December 2022.

The motor finance facility has a limit of $6 million and will mature on 24 February 2024.

“The outgoing board expects that the incoming board and management of the company will engage with the current financier regarding arrangements for the trade finance facility that matures in December 2022,” NZAI said speaking with NZ Herald.

NZAI also says it is in a sound financial position and complies with banking covenants as at the end of July this year.

“The company has continued to trade profitably over the first four months of the new financial year,” NZAI said.

A detailed update of NZAI’s financial position and performance will be released on or before August 20 while its annual meeting will be held on August 25.

Another matter NZAI is experiencing is a query from NZX’s regulatory arm, NZ RegCo, about the independence of shareholders Michael Stiassny and Gordon Shaw.

David Sena, a major shareholder of NZAI said he was confident in the board nominees qualifying as independent directors, reports NZ Herald.

NZAI’s stock had suffered a hit on Monday, down from 65c to 50c after the changes.