In their report on the statutory management of Aorangi Securities, Hubbard Management Funds, Mr and Mrs Hubbard and associated charitable trusts Grant Thornton managers Richard Simpson, Trevor Thornton and Graeme McGlinn said the September cash collection is still $2 million less than expected and that there has been little improvement in the collection of arrears of $3 million.
"Requests will go out shortly for payments due on December 31 and we are guardedly hopeful that the level of collection will be greater this quarter. With dairy cash flow expected to be stronger over the next six months, we anticipate both better returns and a payment of arrears," the managers said.
The statutory managers said a key focus over the last month has been the ongoing analysis of Aorangi Securities, divided into three categories:
Category One includes 31 mortgage loans with an August 2010 value of $59 million.
Category Two includes 15 direct investments by Aorangi valued at $47 million made up of 12 farm loans, two commercial property investments and $10 million in SouthBury Group, a sum "unlikely to be recovered because of its receivership."
Category Three is a loan to the Te Tua Charitable Trust of approximately $24 million.
"Aorangi's ability to recover full repayment or realisation of investments is significantly reduced because of the level of overall indebtedness. Only one in five borrowers is paying any interest on their loans to Aorangi," the managers said.
However, October proved to be a good month for Hubbard Managed Funds with a value of $56 million.
"The nature of the portfolio has led to significant fluctuations in value. Some of the movements in value experienced have been as much as $1 million in a day."
The managers said much of the last month had been spent on working towards the ultimate distribution of assets.
This has centred on a court application to confirm the actions being contemplated to manage the fund in the interests of the investors.
"We are seeking court confirmation that will allow us to manage and maintain the portfolio and to make new investments to protect and enhance the investor's position."
"We hope to file a second and more far-reaching application with the courts by March 31 next year. This is an important part of the process which will determine the entitlement of investors to the assets of the fund and will determine how we distribute those assets to the investors."
"As part of this process we will need to keep investors formally informed throughout."
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