McCloy says that once realisation of all the assets is completed secured debenture holders could recover a total of 40%-45% of their original investment.
“This is at the higher end of the 30-50% scale that we had estimated in June,” he says. “Regretfully the position for subordinated investors has not changed from our position in June, and they will not recover anything from the assets in receivership.”
The receivers are assisting various government authorities who are continuing their investigations.
The receivables being acquired by Cynotech include the standard finance company loans of National Finance including; Loan accounts being paid currently, overdue loan accounts, salvage accounts and loans previously considered to be uncollectible.
The company says the price paid was reached after conducting a due diligence exercise on the loan accounts including an assessment of the collectability of loans in each category.
“Realistically the full face value of the loan book will not be collectable and the consideration being paid reflects that.”
As the deal is a major transaction for the Cynotech, it requires shareholder approval. Until that is gained the receivables are being held under a third party arrangement.
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