Recently, Pyne Gould Corp., the finance group aiming to become a bank, said 'yes' to acquire Equity Partners Asset Management, an asset manager controlled by Pyne director George Kerr for NZ$18 million.

Via a statement, it specified today: "The transaction is part of arrangements that will bolster Pyne Gould's asset management business and allow its MARAC Finance unit to offload impaired loans on development properties."

Initially, nearly NZ$160 million of impaired or likely to be impaired loans would be acquired by Pyne Gould from its MARAC unit, paying cash over time. This will permit MARAC to buy government and bank securities to strengthen liquidity.

Following this, the loans will be acquired by a new unit, Torchlight Credit Fund, one of the arms of Pyne Gould's enlarged asset management unit, to be called Perpetual Asset Management.

Pyne Gould will take a one-time charge - against its June 30, 2009 results - of NZ$60 million to NZ$65 million, in order to enable Torchlight to acquire the loans at fair market value. That includes the NZ$22 million after tax charge already taken in the first half.

Chairman Sam Maling said in the statement: "PGC has not been immune to the impacts of the credit crisis. Still, losses we have suffered are comfortably within the group's capital capability."

The company specified: "Perpetual Asset Management will have the management contract for all of Pyne Gould's funds, including Torchlight, which will specialize in commercial and residential real estate asset backed credit and may become the largest fund of its type in New Zealand."