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Nothing likely for Bridgecorp noteholders

The news may be bad for people holding Bridgecorp debentures, but its worse for those with capital notes.

Friday, August 17th 2007, 5:57AM
People holding Bridgecorp capital notes are not likely to get any of their money back, the receivers said yesterday.

According to the receivers, PricewaterhouseCoopers' partners Colin McCloy and John Waller, there was $29 million invested in capital notes through a subsidiary company Bridgecorp Investments (BIL) which is now in liquidation.

Last week they released a preliminary estimate that suggested secured debenture holders would likely get between 25c and 74c in the dollar back from the company.

The capital notes rank behind the debenture holders, the receivers say.

McCloy, who is a BIL liquidator, said that because of the ranking of the amounts and the preliminary estimate of recoveries for Bridgecorp, the liquidators' view was that it was unlikely capital note holders would recover anything of the $29 million owing to them by BIL.

BIL's reported assets comprise a $1.24m tax asset and various amounts linked to related company Bridgecorp, represented by inter-company advances totalling $1.9m; a dividend due of $1.1m; and $33m of redeemable preference shares held in Bridgecorp.

"Unfortunately, unless there are recoveries from the $1.24m tax asset, it is unlikely there will be any recoveries for the capital note holders. We appreciate that this is not good news for the holders of the capital notes and we regret not being able to deliver more positive news.

"Our investigations into potential recovery avenues continue, and the final position will not be known for some time. We will contact BIL capital note holders if the situation improves sufficiently for any return to be made."

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