Elderslie pins survival hopes on former realestate.com.au chief
Monday, June 16, 2008/
Private investor and former realestate.com.au chief executive Nigel Purves has emerged as a potential white knight for the troubled Elderslie Finance Corporation.
On Friday, the Federal Court gave Elderslie until 1 July to complete a sale and adjourned an application by trustee company Perpetual Trustees, which is seeking to have various orders made against Elderslie, including potentially putting the finance company into receivership.
Elderslie has undertaken that it will not pay debenture and unsecured note holders for the next two weeks, nor will it accept deposits from members of the public.
Perpetual launched action against Elderslie on 5 June, just two days after former Liberal Party leader John Hewson resigned as chairman of the group.
Perpetual said in a statement that its action was prompted by a report by accounting firm PricewaterhouseCoopers, which “suggested it was likely EEFC was or would become insolvent unless the company was sold and received a significant cash injection to meet its short-term liquidity requirements”.
In Friday’s hearing, Elderslie provided new evidence including a contact of sale and an affidavit from Purves.
According to a statement on Elderslie’s website, it is envisaged that the transfer of control of Elderslie to Purves’s company Inquisitor “will allow the injection of debt and equity” required to keep Elderslie alive.
Purves, who is based on the Gold Coast, is yet to talk publicly about his plans. He has been brought into a number of companies as a turnaround specialist during his career.
His most recent role was as chief executive of electronic transaction company Cosmos. Purves was appointed chief executive of Cosmos in early 2004 and given the task of turning the company’s fortunes around. But his contract was terminated in March 2005, just days after the company said its half-yearly performance “exceeded the company’s expectations”. Purves said at the time he had a disagreement with some of the company’s shareholders.
Prior to that, Purves was managing director of real estate classifieds company realestate.com.au. He joined in late November 2000 (just before News Limited bought a large stake in the company) and resigned in August 2001.
Purves has also run a private investment bank in the United States and was chief executive of listed battery company Kinetic Power. Kinetic listed on the Australian Stock Exchange in August 1997 at $1 a share and rose quickly to $1.39. But less than 12 months later the company was placed in receivership after its main financier, National Australia Bank, withdrew its support.
The case between Elderslie and Perpetual is due to return to court at 10:15am on 1 July.
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