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Lombard payout cut - again

Receivers of finance company Lombard Finance & Investments say debenture holders will get between 19 cents and 40 cents in the dollar, down from the estimate made in May, because of deteriorating credit markets.

Wednesday, September 10th 2008, 6:27AM

by Jonathan Underhill

In a letter to investors posted on PricewaterhouseCoopers' website, the receivers say slumping market conditions "have had an adverse effect on the receivers' ability to recover outstanding loans and realise assets."

Receivers John Waller and John Fisk cut their estimate after an assessment of Lombard's loan book, which was valued at $136,714 as at March 31. They reduced the recoverable range to $29 million-to-$53.7 million in May and have cut the estimate further to $26.8 million-to-$49.5 million as at August 31.

Some 56% of the loan book is for bare land in coastal subdivisions or development sites. Given the slowing property market, there is now "significant uncertainty" about how long it would take for an orderly sell-down of the sites, the receivers said.

The receivers said some 4,000 debenture investors probably won't receive any payments this year.

More than 20 finance companies have either failed or sought a moratorium on payments to investors in the past two years.

www.businesswire.co.nz

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