Real estate group The Agency (ASX: AU1) has been dealt a blow by the Takeovers Panel which has forced it to delay a vital refinancing deal by at least a week.
Shareholders were due to vote today on a $5 million in convertible note issue to Peters Investments to repay The Agency's debt facility with Macquarie Bank.
This is the preferred option for The Agency board, which is also facing the prospect of a hostile takeover by its largest shareholder Magnolia Equities III.
A formal offer has yet to materialise, but Magnolia says it will provide an alternative that will help the company repay its debt facility. The offer is conditional on the notes issue not proceeding.
After taking its concerns to the Takeovers Panel about Magnolia's capacity to launch an offer, The Agency's board sought a ruling that Magnolia must provide evidence of available funds for the bid.
Instead, the Takeovers Panel last night issued interim orders that the Agency withdraw the vote on the note issue from today's AGM until 30 December.
Its reasoning is to maintain the status quo until an independent expert's report prepared by Nexia Perth Corporate Finance relating to the Peters proposal has been reviewed by a third party appointed by Magnolia.
"The orders (among other things) permit a vote on the Peters proposal resolutions to proceed on or after 30 December 2020 provided Agency makes available to Agency shareholders a response by Nexia to the comments of the third party," says the Takeovers Panel.
The Agency has moved its AGM to 30 December to facilitate the vote on the note issue to Peters Investments, a private investment company owned by horse breeder Bob Peters.
"The board remains committed to voting in favour of all resolutions being considered at the postponed meeting to the extent each board member can vote on the relevant resolutions," says The Agency in a statement to the ASX.
"The board believes Resolutions 3 to 7, if passed, will provide The Agency with a credible long-term funding package to underpin continued growth plans."
The Agency has managed to secure extensions to repaying its Macquarie debt facility which was originally due in March this year. The deadline is currently December 31.
The latest manoeuvre caps off a solid performance by The Agency in a difficult year for the real estate industry. Although it posted a higher loss of $9.06 million in FY20, The Agency delivered its first ever positive EBITDA of $2.66 million.