Orange Finance pushes out moratorium timeline
Orange Finance has extended its repayment plan under the terms of its moratorium for another year as it narrowed its underlying loss.
Friday, August 13th 2010, 5:00AM
by Paul McBeth
The financier owned by Doug Somers-Edgar and controversially managed by his Matrix Funding Group posted an operating loss before tax of $3.9 million in the year ended March 31, smaller than the $5.4 million loss a year earlier. The firm turned profitable, posting bottom-line earnings of $1.3 million after a debt restructure gave it an unrealised fair value gain of $6.5 million, which it said will reverse over the new repayment terms.
In August, the firm pushed out its maturity date for all debenture stock by a year to July 31 2012, with interest accruing at a rate of 2% above the 90-day bank bill.
Orange Finance paid $6.3 million to debenture holders after the debt restructure, leaving a carrying value before unrealised adjustments at $19.3 million. It made a further repayment of $425,000 in April.
Auditors Grant Thornton flagged two fundamental uncertainties in its report. The uncertainty in the property market might further impair or delay loan repayments worth $14.1 million. The auditor also noted a loan worth $3.5 million was subject to potential legal action, and may also need to be further impaired.
Orange Finance froze repayments to some 2,500 debenture holders owed $23.2 million at the end of 2008.
Matrix Funding's management fee was $324,000 in the year through March, less than half the $852,000 in the 2009 financial year.
Paul is a staff writer for Good Returns based in Wellington.
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