CBL Corporation, which was once a feature of many KiwiSaver funds and valued at $750 million, has been placed into liquidation by the High Court in Auckland. CBL Corporation suspended trading in its shares on the NZX share market in February last year after subsidiary, CBL Insurance, experienced problems in Europe and incurred a large debt.
CBL Insurance provided guarantees to New Zealand homebuyers on new homes, provided that they had been built without any defects. Although their business impact was limited in New Zealand, CBL Insurance had a similar building guarantee business in France that found itself struggling under a large number of claims.
The directors of CBL Corporation withdrew their opposition to its liquidation before the liquidation hearing this month, after directors, Alistair Hutchison and Peter Harris, failed in an attempt to secure a deal that could save CBL Insurance and CBL Corporation.
"Unfortunately, even after 15 months, the banks have not seen any material money from the sales of CBL Corporation assets, most of which are still in process. So the very large bank debt has not reduced," Harris said.
In November the pair failed to gain support for a Deed of Company Arrangement (DOCA) plan to restructure CBL Insurance's debts.
“Although Alistair and I consider that we have the creditors by numbers to support the DOCA, we don't have the creditors by value required without the banks' agreement. Despite our efforts, CBL Corporation will go into liquidation," Harris said.
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