Destra Corporation Limited's (destra) November 2007 acquisition of a 10% stake in Beyond International Limited (Beyond) was financed by Opes Prime under an equity finance facility. The facility was structured as a securities lending arrangement so that the shares acquired by destra (Beyond Shares) were “lent” by destra to Opes Prime on terms where title to the shares passed to Opes Prime. destra understands that the Beyond Shares were pledged to ANZ to secure borrowings by Opes Prime. As at 31 March 2008, the amount owed by Destra to Opes Prime was $7.3M.
On 27 March 2008 Opes Prime appointed administrators and ANZ appointed receivers to the securities held by them (including, the Beyond Shares). These appointments amounted to an event of default on the part of Opes Prime under the terms of the facility. On 31 March 2008, destra notified Opes Prime of the default. The consequence of the event of default is that the obligation of Opes Prime to redeliver the Beyond Shares to Destra is replaced by the obligation to pay an amount calculated by reference to the value of the Beyond Shares. This amount is netted off against destra’s obligation to repay the amount owed and it is expected that Opes Prime will owe destra approximately $100k. Accordingly, destra no longer has any interest in the Beyond Shares held by Opes Prime and has no obligation to make further payments to Opes Prime.
destra will crystallise a loss on its investment in Beyond of approximately $900k. That loss will have no further cash flow impact.
destra Corporation Chairman Carl Olsen said "by taking this action, we have discharged the outstanding debt and prevented any further fallout from this matter".
destra advises that destra shares held directly and indirectly by two directors of destra are now held by ANZ as a result of the appointment of a receiver to Opes Prime. 10,591,631 destra shares previously held by CEO Domenic Carosa and associates are now held by ANZ. Mr. Carosa still holds a relevant interest in 1,825,224 shares in destra. 10,962,104 destra shares previously held by associates of non executive director Paul Choiselat are now held by ANZ. Associates of Mr. Choiselat still hold a relevant interest in 248,825 shares in destra.
The $15M rights issue announced to the market on 17 March will proceed in accordance with the revised timetable. The rights issue is fully underwritten by Prime Media Limited subject to the terms and conditions of the underwriting agreement which contains customary terms in relation to a rights issue including termination events.