Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Strategic Finance receivers failed to find credible offer

Strategic Finance receivers failed to find credible offer for loan book

Nov. 19 (BusinessDesk) – Receivers of finance group Strategic Finance couldn’t tempt any potential buyers of the loan book to make a credible offer and will continue with recoveries on behalf of 10,000 debenture holders owed $368 million.

Offers received “fell short of even our ‘low’ estimate of gross recoveries from the loan book,” John Fisk and Colin McCloy of PricewaterhouseCoopers said in their first six-monthly report. “We consider that the best possible outcome for secured debenture investors will be achieved via the receivers continuing to realize the loan book.”

Bidders made low-ball offers because of the high proportion of second mortgages, the threat of enforcement action by prior-ranking creditors and the complexity of arrangements with Strategic affiliated companies. About 58%, or $131 million, of the net loan book as at Feb. 28 is in second mortgages. The receivers’ preliminary estimate for gross recoveries, prior to costs, is 12 cents to 35 cents in the dollar.

The report shows the proportion of Strategic’s lending into formerly hot parts of the property development market, with a concentration of loans in Queenstown and Northland, where other distressed lenders are trying to recoup their money. Money was lent on bare land development sites of where further funding was required and other creditors had a prior call, the receivers said.

In addition, loans were made on overseas property, such as in Fiji, where recovery was hampered by a difficult political situation.

Of Strategic’s 87 loans, about 25 were to borrowers either in liquidation, receivership or had property that was in the process of being sold by the first mortgagee.

For the period of the receivership from March 12 to Sept. 12, some $4.87 million was recovered from the loan book, while payments for various costs and fees amounted to $2.6million, leaving net funds received at about $2.98 million.

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

The finance company missed its milestone repayment on Jan. 7 after it failed to generate enough loan recoveries, and later had a liquidator appointed.


© Scoop Media

Business Headlines | Sci-Tech Headlines


RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>


Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>


NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>


Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>


Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>