tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, December 5th, 7:44PM

Investments

rss
Latest Headlines

Strategic Finance loan book sale stalls

Investors in failed financier Strategic Finance Ltd. could get as little as 12 cents in the dollar out of their debenture stock after bids for the firm's loan book fell short of expectations.

Friday, October 22nd 2010, 2:35PM

by BusinessDesk

Receivers John Fisk and Colin McCloy of PricewaterhouseCoopers expect to recover between 12% and 35% of the principal amount owed to debenture holders after the sales process threw up sub-par offers, they said in a letter to investors.  

The bottom-end of the range is less than one of the low-ball offers investors received from Australian-based Stock & Share Trading Co., which offered 15 cents in the dollar for up to $200,000 worth of debt in April.  

"Given that the final or near final offers fell short of even our ‘low' estimate of gross recoveries from the loan book, we consider that the best possible outcome for secured debenture investors will be achieved via the receivers continuing to realise the loan book," they said in their letter.  

Last month, investors got their first payment of 2 cents in the dollar, a total amount of $7.4 million, after Strategic Finance received just $5.4 million from the $42 million it had recovered since March, most of which went to prior ranking creditors.  

Strategic Finance was sent to the receivers in March by trustee Perpetual Trust, ending a moratorium arrangement that had been in place since Dec. 2008.

The finance company missed its milestone repayment on Jan. 7 after it failed to generate enough loan recoveries. 

It had tried to get out of trouble in a Hanover-style debt-for-equity swap with South Canterbury Finance that would've given Strategic investors a mix of SCF debentures, shares and preference shares, but Perpetual chose to call in the receivers instead.  

When liquidators John Cregton and Andrew McKay reviewed the firm in Aug., they reported Strategic Finance owed Bank of Scotland $76 million and secured debenture holders $291.7 million, leaving a deficit after secured creditors of $121 million.

Including unsecured creditors, the book value deficit blows out to $195.5 million. 

 

« ANF investors won't get their money backKiwibank trumping with flexible, high rate deposits »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
  • Partners kills its matrix
    “@Backstage, thanks. I agree there is no relationship to CoFI, though, from a service perspective, I have two other providers...”
    2 days ago by JPHale
  • Partners kills its matrix
    “Partners Life has decided to stop using its COM for advisers as it believes the system may breach the CoFI regulations which...”
    2 days ago by Amused
  • Partners kills its matrix
    “Insurance companies should stick to their lane. They are not advisers and even those that employ advisers should not be crossing...”
    3 days ago by Tash
  • [GRTV] The nitty gritty of Smart’s ETFs
    “Advisors should consider all gateways into investment markets including cheaply priced ETFs to provide access to low priced...”
    3 days ago by Pragmatic
  • DRS member or not - client care remains advisers’ responsibility
    “FAPs are members of DRS too. Substitute “adviser” for “FAP” and the story is actually a lot more accurate. If...”
    4 days ago by Aggressively_passive
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com