Strategic Finance Ltd is now in the hands of receivers John
Fisk and Colin McCloy of PricewaterhouseCoopers who say they
are working quickly to maximise funds for investors.
The receivership ends a moratorium the company had been
operating.
Strategic Finance has around 13,000 investors with
investments of $417 million. In calling in the receivers,
trustee Perpetual Trust said it believed receivership was a
better than proceeding with proposals the company had
received.
"The receivers will be focused on achieving the best outcome
for investors, and in particular that it is expected
ultimately to provide better returns for investors."
Strategic's loan book had declined in value to $220 million
in December 2009 from $477m when the moratorium was approved
in December 2008.
The decline in the value of the loan book together with
failure to meet the targeted level of investor payments
envisaged by the moratorium created a review events under the
trust deed. A number of offers from third parties were
received by Strategic.
Perpetual Trust believed it provided the board and management
team of Strategic Finance with a reasonable amount of time to
develop these offers and for it to submit them to Perpetual.
Perpetual Trust will be writing to investors next week and
the receivers will be in contact with investors in the next
few weeks with contact details, their expectation of the
timetable for their work programme and when they will be able
to advise their expectation of how much of investors' monies
will be realised.
Mr Fisk said the receivers were working as quickly as they
could to determine the best option going forward to ensure
maximum funds were distributed to investors.
He also believed the receivership would provide greater
certainty, including for unsecured creditors owed $5.2m.
Strategic Finance is a specialist property financier whose
business was mainly funded by debentures. In August 2008 it
withdrew its prospectus and suspended all payments to
security holders.
In December 2008 it won approval for a managed wind-down of
its loan book as an alternative to receivership. The company
made an unaudited loss of $99.8m in the six months to
December 31 due to significant provisioning on its property
portfolio.
Its loan book value fell below 75 percent of principal owed
to debenture holders, depositors and subordinated note
holders. This, as well as the failure to make the target
payments to investors on January 7, triggered an event review
and talks with the trustee.
Strategic had received a total of seven proposals from
outside parties, but only two were considered viable options,
Radio New Zealand has reported. The New Zealand Herald
newspaper has reported that the company was in talks with a
single bidder and that receivership was still an option.
Former All Black Jock Hobbs is a director of the company.
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