Equitable Mortages' receivers expect to repay between 65% and 70%
Equitable Mortgages' receivers say they expect loan recoveries may ultimately enable them to repay between 65% and 70% of the principal owed about 6,000 investors, or between $124.9 million and $134.6 million.
Monday, February 20th 2012, 7:12AM
by Jenny Ruth
Grant Graham and Brendon Gibson of Korda Mentha say in their third statutory report they have repaid the government about $50 million so far, about 26% of he $192.3 million owed debenture holders when the company went into receivership on December 17, 2010.
About $178 million of the principal owed was covered by the government guarantee and the receivers say, as at January 27 this year, the Treasury has advised about 97% of those investors by value had been repaid.
A related company, Equitable General Insurance (EGI), had issued loan loss cover policies in respect of Equitable's advances, the receivers say.
"We are assessing the claim that can be made under these policies and discussing with EGI its ability to meet these claims which we expect will significantly exceed EGI's reserves. Our recovery estimate above does not allow for any recovery from these policies."
The receivers expect there will be a shortfall in returns owing investors not covered by the guarantee and that it is "extremely unlikely" unsecured creditors owed about $25 million will be paid anything.
Graham and Gibson are receivers for another finance company, Numeria Finance, and in a report on that company they say debenture holders owed $3.9 million are likely to receiver a final distribution of one cent in the dollar, bringing their total repayments to 37 cents in the dollar.
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