Trustee Appoints Receiver to Strategic Finance

Trustee Appoints Receiver to Strategic Finance

Perpetual Trust as trustee for Strategic Finance have today appointed receivers to Strategic Finance. The receivers are John Fisk and Colin McCloy of PricewaterhouseCoopers.

Strategic Finance has around 13,000 investors with investments of $417 million. In December 2008 they voted for a Moratorium which put in place a programme for directors and management to realise the assets and repay investors. In 2008 Strategic’s loan book was valued at $ 477 million and the expectation at the time of the moratorium was that 100% of investor principal plus interest would be repaid in due course.

By December 2009 the value of the loan book had declined to $220 million, and by January of this year the value of the loan book was less than 75% of Strategic Finance’s liabilities.

That together with failure to meet the targeted level of investor payments envisaged by the moratorium created Review Events under the Trust Deed.

Following the announcement of those two Review Events in January this year, a number of offers from third parties for restructuring and/or sale of its assets were received by Strategic. Perpetual Trust provided the Board and management team of Strategic Finance a reasonable amount of time to develop these offers and for it to submit them to Perpetual.

Perpetual Trust, as trustee for investors, is now satisfied having completed a thorough review that receivership is a better option for investors than proceeding with any of the proposals.

Perpetual Trust believes that receivership is the best option because 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.

While the processes required following the Review events and in assessing the options have taken longer than Perpetual Trust would have wished, Perpetual believed it was important to establish whether any of the restructuring or sale proposals would have provided better returns or more certainty for investors.

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.

ENDS

© Scoop Media