Mystery bidder makes low-ball offer for Strategic investors

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Strategic Finance’s receivership has drawn out another low-ball offer to investors, this time from a company incorporated in Australia looking for $200,000 worth of debentures.

Friday, April 9th 2010, 6:00AM 1 Comment

by Paul McBeth

Australian-based Stock & Share Trading Company Pty Ltd is pitching to Strategic investors on a "first come, first served" offer to buy their debentures for 15 cents in the dollar. That's only 5 cents better than the last offer by Christchurch-based Marchmont Securities Trust in January that prompted a warning note from the Securities Commission and a letter of apology from Strategic's former chief executive Kerry Finnigan.

The regulator declined to confirm or deny whether they had received any complaints about the offer.

Receiver John Fisk, of PricewaterhouseCoopers, said the offer was a speculative one, and encouraged investors to seek independent financial advice before responding to the offer. He said they are continuing to work through the Strategic receivership, and would hopefully complete their first report by the end of the month.

"There are two unknowns at the moment which we are working through, and those are the amount and timing of any payments," he said.

The unsolicited letter to Strategic Investors was sent on March 31, and will remain open until April 16.

Stock & Share sole director is John Armour, according to the Companies Office website, and his New Zealand representative is Prudentia Law.

The law firm's principal, Andrew Kennedy, said he would have to confer with his client before commenting on the offer or his relationship with the company.

Trustee Perpetual Trust did not immediately respond to depositrates.co.nz's inquiries.

Strategic was sent to the receivers last month after it breached the terms of its moratorium twice by missing its first repayment to debenture holders and increased provisions for bad debt pushed it beyond the required ratio of loans to assets.

Currently 10,000 debenture holders are owed $368 million, 1,000 noteholders are owed $22 million and 66 depositors are owed $1.5 million, according to the receivers, who have confirmed there will probably be a shortfall in the money available for creditors.

Paul is a staff writer for Good Returns based in Wellington.

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