Asset Finance expects to register a prospectus in 10 to 12 days
Asset Finance expects to have a new prospectus registered within the next 10 or 12 days, "if not sooner," says managing director and 66% shareholder Clive George.
Friday, July 20th 2012, 4:02PM
by Jenny Ruth
Asset was forced to stop issuing debentures on April 13 by the Financial Markets Authority (FMA) which was concerned disclosure in the prospectus about a $350,000 loan may have been misleading in a material way, something which Asset disputed.
The FMA's order lapsed on May 4 but Asset chose to wait until it had this year's audited accounts to issue new offer documents, George says.
"We still don't agree with what they did but we're only a small organisation and you can't take on God," he says.
Asset has about 500 individual investors with deposits ranging from $1,000 to about $450,000 and "some of those people have been with us since before we had a prospectus" back in 2004.
Nevertheless, the FMA action "is certainly damaging to your brand. There's no doubt about that. It's a fact of life," George says.
Asset's auditors, Grant Thornton, tagged its accounts for the year ended March 31 this year with a "material uncertainty" clause. "The going concern status of the company depends on the company successfully registering a new prospectus," the auditors said.
"Should the company cease to be a going concern there would be material changes to the valuation of assets and liabilities presented in these financial statements," they said.
George says he takes issue with those statements as well. Retail debentures aren't the only way to fund a finance company and Asset could have looked at other methods, such as wholesale finance, if it hadn't been able to prepare a prospectus, he says.
Being "offline" on taking new debentures for three months hasn't affected Asset's lending "we lent more month last month than for several years. We had a boomer."
Asset's debentures fell to $16.6 million at March 31 compared with $17 million a year earlier and it also had $791,087 in unsecured capital notes, down from $1 million a year earlier.
A little under 56% of Asset's lending at March 31 was on personal loans, down from 60.5% a year earlier with the rest of its lending being various types of business loans. George says the only reason personal loans have dropped is because the demand isn't there.
"In a perfect world I would rather have a consumer loan."
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