The finance company managed to pay in full the $25 million priority debt facility to the Bank of Scotland, though "sufficient loan repayments have not occurred to enable SFL to be in a position to make the first payment to stockholders" scheduled for January 7, chairman Denis Thom told investors in a letter.
Last month, he said the company needed to complete several sales before everything shut down over the Christmas holiday period to meet the payment, and that Strategic may have to increase its provisioning.
"Not all of the conditional and unconditional sales that were required to settle to enable loans to be repaid and provide SFL with the required cash proceeds have occurred," Thom said in his letter.
"The SFL board has informed the trustee that it considers it likely that a ‘review event' under the moratorium arrangements will occur on 7 January 2010 and this has already resulted in the commencement of constructive dialogue between the company and the trustee."
Strategic froze repayments in August 2008 before a majority of investors voted in favour of a moratorium in December of that year. In August last year, the company posted a full-year loss of $175.7 million after it was forced to write down $77.6 million worth of bad debt and increased total impairments to $146.5 million.
The company has at least 14 days to negotiate with trustee Perpetual Trust once the review event is triggered, though Thom expects more time will be required.
During this period of negotiation, Strategic will continue to try and realise its assets to "make the targeted January payment to investors."
Under the terms of its moratorium, the company had to repay at least 9% of total principal moneys owed, including the debt facility with the Bank of Scotland.
Last month, Thom indicated the board's concern with the "higher incidence" of prior ranking mortgages exercising their rights, which would force lower-ranked creditors to boost provisioning.
Strategic wrote a number of second mortgages on resort, residential and commercial property developments in Auckland, Queenstown and Fiji during the property market boom. Representatives from Strategic and Perpetual Trust were not immediately available for comment.
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