NZF withdraws prospectus after loan problem, FMA concerns

The withdrawal decision was taken "following the receipt of advice from one of (NZF Money's) borrowers that the purchaser with whom an unconditional contract of $3.5 million had been signed, and was due for imminent settlement, would not be able to settle on time and instead wished to renegotiate the terms of the existing unconditional contract that was in place," NZF told the stock exchange.

Thursday, July 21st 2011, 4:12PM

by Jenny Ruth

The company is "working through various options to address the impact of this delay on its projected cashflow," it said.

The company later clarified that it had actually voluntarily withdrawn its prospectus on Monday, July 18 following discussions with the Financial Markets Authority (FMA). It had been discussing amendments which would be acceptable to the FMA but since being advised of the delayed sale had decided not to proceed with the amendment, NZF said.

NZF Money's prospectus was last updated on June 30. It showed total loans and advances to customers at June 24 fell to $29 million, of which 78.69% was secured by first registered mortgages, from $34 million at March 17, 81.39% of which was secured by first registered mortgages.

Of those loans, $19 million had been purposely allowed to fall past due so the company could "keep its options open, improve its ability to renegotiate revised lending terms and conditions and to control the sale and recovery process where necessary." Loan impairments at June 24 were $3.7 million with a further $2 million of impairments possible, the prospectus said.

NZF Money's secured debenture stock had fallen to $18 million at June 24 from $21 million at March 17 and equity had dropped to $10 million from $13 million.

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