First Five Star payment not so starry
Five Star Consumer Finance investors area getting their first payment, however they have also been told they are likely to recover less of their investment than previously indicated.
Friday, April 4th 2008, 11:28AM
This represents the majority of expected returns to investors from asset realisations which Agnew advised was now forecast to be between 20% and 25% of secured debenture holders investment.
He says the downward revision from the preliminary estimate of 26% to 40% is primarily due to the low level of recoveries from Five Star's commercial ledger.
Agnew confirmed the receivers previously expressed view "that the majority of these loans are outside normal commercial lending practices."
The receivers are assisting various government authorities who are continuing their investigations in this regard.
Meanwhile, Five Star's consumer loan book has been sold to a party associated with the Receivables Management Group for an undisclosed sum.
The sale was at a significant discount to its face value due to its distressed nature. The receivers says that the sale value of the loan book "represented the best possible value obtainable via a transparent and competitive sale process in a difficult market."
"The sale was favourable when compared to the potential value that could be achieved if the loan book was managed, and collections of principal and interest were collected, by us over time," they say in a report to investors.
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