QVT Supports Rescue Plan of TZ Limited

Jan 28, 2010, 19:38 ET from QVT Financial LP

SYDNEY, Jan. 28 /PRNewswire/ -- QVT Fund LP and Quintessence Fund L.P. (together, "QVT"), announced their support for the rescue plan proposed by the directors of TZ Limited ("TZ" or the "company") (ASX: TZL).  If passed by shareholders, this rescue plan will allow QVT to convert approximately AUD$28.6 million of debt into TZ shares.

QVT believes the rescue plan is in the best interests of all shareholders and will significantly benefit TZ and all shareholders, as, rather than enforcing its claim for repayment of AUD$28.6 million, QVT is acquiring shares at a price that is above TZ's last trading price (AUD$0.96) and agreeing to place shares in escrow for a twelve month period.

QVT is a long term investor in TZ and believes that its interests are aligned with those of other shareholders.  QVT believes in the company's unique technology, product development opportunities and its dedicated staff, who have remained committed during this trying period.  

In December 2007, QVT subscribed for AUD$24 million worth of convertible notes.  TZ failed to pay QVT the annual interest payments on these notes in both 2008 and 2009.  

Since June 2009, QVT has worked with the current board of the company on a restructure that would repay QVT without destroying value for shareholders.  In furtherance of this effort, QVT invested an additional AUD$2 million in the company to sustain TZ's operations and agreed to a moratorium on the outstanding debt owed to it.  

As set out in TZ's Notice of Annual General Meeting and other materials dispatched to shareholders and released on ASX on 27 January 2010 ("TZ AGM Documents"), the company's Independent Expert, Lonergan Edwards & Associates Limited, has strongly recommended that TZ shareholders approve the rescue plan (in the absence of a superior proposal) because:

  • If the rescue plan is not implemented (and in the absence of a superior proposal, the likelihood of which they consider remote), TZ shareholders are highly unlikely to receive any value for their TZ shares because TZ is likely to be placed in administration;
  • The rescue plan implicitly values TZ's existing shares (in total) at AUD$48.6 million; and
  • TZ shareholders will therefore be significantly better off if the rescue plan is approved.

The rescue plan requires approval by TZ's shareholders at the company's Annual General Meeting on February 26, 2010.  QVT urges all shareholders to support the rescue plan by voting IN FAVOUR of the resolutions.

QVT itself is ineligible to vote on the rescue plan resolutions, but will vote in favor of the re-appointment of the current directors of TZ: Chairman Mark Bouris, Kenneth Ting and Willem de Vlugt.  

Further information about the rescue plan is set out in the TZ AGM Documents.  TZ shareholders should read these documents carefully before making any decision in relation to TZ or how to vote at the Annual General Meeting.

For Further Information Call:

In Australia & Asia:

Tim Allerton

City PR

+61 2 9267 4511


Shawn Pattison/Patrick Clifford

The Abernathy MacGregor Group

+1 (212) 371-5999