Kiwi Insurer CBL Falls Into Administration
New Zealand building and business insurer. CBL Insurance has been placed in administration after the NZ High Court on Friday ordered that the Auckland based insurer be placed into interim liquidation on an application by the Reserve Bank of NZ. CBL Insurance is a subsidiary of NZX-listed CBL Corporation. In a statement today Korda Mentha New Zealand partners Brendon Gibson and Neale Jackson were appointed Voluntary Administrators by the Board of CBL Corporation Ltd (and certain of its subsidiaries) on last Friday, February 23.
Administrator Brendon Gibson said in the statement: ”We are working closely with CBL’s management and its directors to execute strategies that preserve the CBL group’s various operating units.” Voluntary administration allows the group to continue trading through a formal process at the parent-company level, to determine the best way forward for all stakeholders.
CBL is a credit and financial risk specialist insurer listed on the New Zealand and Australian stock exchanges.
This administration relates to New Zealand-domiciled companies. It does not affect any other companies that are ultimately owned by CBL Corporation Ltd. Other CBL Group companies that are unaffected include Assetinsure and DepositPower in Australia and Europe-based PfP, SFS and European Insurance Services.
Friday’s order from NZ High Court ordered that details of the application (financial details in particular) be kept confidential. The order enables the interim liquidators to “maintain the assets of the defendant company”, including the ability to take custody and control of assets, seek freezing orders, and take control of all global assets irrespective of which country they’re located in..
Justice Patricia Courtney ordered the appointment of Kare Johnstone and Andrew Grenfell, from insolvency firm McGrath Nicol, as interim liquidators of CBL Insurance. A statement from the Reserve Bank said policyholders with CBL should address queries about their own position to the interim liquidators.
The CBL website describes CBL Insurance as “New Zealand’s largest and oldest credit surety and financial risk provider, supervised and regulated by the Reserve Bank of New Zealand".
“The business is focused on financial risk products, builders risks, sureties, guarantees and contractor bonds worldwide - in particular in Europe and Scandinavia," it says.
The company announced last week that Irish regulators had told its subsidiary there to stop writing new business until further notice. The company also announced two weeks ago that it would quit its ‘long tail” French construction business (That’s covering insurance risks that potentially could produce a claim for periods longer than a year).
CBL shares last traded at $2.82 on the ASX earlier this month. trading in the comany’s shares was suspended by the NZX on February 8 (https://www.nzx.com/announcements/313917).
“This decision follows the release of several announcements by CBL since it was placed into a trading halt on 2 February 2018, and engagement between NZXR, CBL, the Financial Markets Authority (FMA), the Reserve Bank of New Zealand (Reserve Bank), and a number of overseas regulators with prudential oversight of CBL’s international insurance business,” the NZX said.
"Based on the information available to it at this time, NZXR is concerned that not all material information relating to CBL and its ordinary shares is available to the market. Furthermore, NZXR understands that the FMA and other regulators have raised concerns relating to the completeness and veracity of information that has released to the market by CBL. In these circumstances, NZXR is not satisfied that the market would currently be able to trade in CBL on a fully informed basis.” The ASX suspended trading on February 12 at the company’s request, CBL said it was working towards “a capital raise”, but gave no further details.
CBL Corporation’s financial year ended on December 31 and it hasn’t produced a financial result or annual report and accounts.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.