Strategic Finance loss widens
Strategic Finance, which has a moratorium on payments to investors, said its loss widened in the 12 months through June as property values fell, more borrowers defaulted and prior-ranking lenders took action to recover loans over properties subject to SFL mortgages.
Wednesday, July 15th 2009, 11:23AM
The finance company said the operating loss in the 12 months ended June 30 was about $98 million, while shareholders' funds amounted to about negative $25 million, Strategic said in a statement. In the first half, the net loss was $32.8 million.
"SFL, along with all participants in the property and finance sector, continues to be affected by the difficult economic climate," the statement from chief executive Kerry Finnigan said.
The company will make "significantly higher" levels of impairments, provisions and bad debt write-offs on loans in its full-year results.
The final determination on impairments is subject to a review by auditors KPMG, it said. The company doesn't expect to resume dividend payments on its perpetual shares and interest won't be paid on subordinated notes, with 85 cents in the dollar of principal to be repaid during the moratorium.
The total owed to subordinated noteholders is about $21 million, it said.It does expect to repay all of the principal and interest to depositors, debenture holders and its prior ranking BOS International facility.
Strategic froze repayments to 15,000 investors owed $325 million in August.
(BusinessWire)
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