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Belgrave down

Belgrave Finance has chosen to go into receivership, rather than seek a moratorium like other companies have done.

Wednesday, May 28th 2008, 12:09PM
Belgrave is one of the smaller finance companies, owing investors $22 million. Its lending was mainly "mezzanine in nature, with many loans being secured by land with development potential."

Managing director Shane Buckley and director Steve Smith say, in an open letter to clients, that the company has been "been affected by the current property market downturn and the inability of developers to raise alternative funding from other financiers."

These discussions have included assessing the various merits of a proposed moratorium, capital restructure, and seeking approval of alternative funding lines.

"Due to the significant lack of investor confidence in the finance industry, resulting from well-publicised previous failures, our reinvestment rates for secured debenture stock investments have fallen alarmingly.

"Based on current market information we do not expect any improvement in the reinvestment rate in the foreseeable future."

Belgrave tried to differentiate itself by offering a guaranteed product.

Belgrave's trustee, Covenant Trustee has appointed Grant Graham and Brendan Gibson at KordaMentha as receivers.

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