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

 

Strategic Finance receivers prepare to wind up

Strategic Finance receivers, seven years in, prepare to wind up with final payment

By Jonathan Underhill

Oct. 30 (BusinessDesk) - The receivers of Strategic Finance say they'll make one final payment to investors, lifting the total payout to 21 percent, before calling time on the seven-year saga.

To date, distributions in the receivership have been 20 cents in the dollar, or $73.5 million, for the 10,000 secured debenture investors who had invested $367.8 million in the failed company. Receivers John Fisk and David Bridgman of PwC said in their 15th report on Strategic and associated entities that their revised estimate for the final distribution is up from a previous range of 20-to-20.7 percent. No distribution was made in the latest six-month period.

"The receivers intend to shortly make one further distribution to secured debenture holders, following which the receivership will be brought to an end," they said. At the time of their appointment in March 2010, Strategic's major remaining asset was its portfolio of property loans.

In the receivers' previous report in May this year they advised that there was one material remaining loan where the underlying property wasn't under contract or subject to any arrangement for sale. The loan is a second mortgage on a property "and there are substantial amounts owing to the first mortgagee". The receivers said no funds were expected to be available and they had assigned Strategic's interest in the loan to the receiver of the borrower.

While that won't result in further realisations for Strategic, it "allows the receivership of Strategic to be brought to an end," they said. A final payment of $100,000 plus interest was received from a guarantor of a loan, they said.

Given the estimated return to secured debenture investors, there was unlikely to be anything for unsecured creditors, including unsecured depositors and subordinated noteholders, they said.

Strategic was sent to the receivers in 2010 by trustee Perpetual Trust, ending a moratorium arrangement that had been in place since December 2008, and was one of the larger failures in the finance sector collapse last decade.

The Securities Commission, the Financial Markets Authority's predecessor, began investigating Strategic in 2009 when former Act Party MP John Boscawen told Parliament the finance company misrepresented about $68 million worth of debt which it classified as second mortgages when they were effectively a third-ranking security. Former Commerce Minister Simon Power subsequently referred the matter to the regulator.

The FMA cut a $22 million deal with the former directors and auditor of Strategic in 2014, including undertakings from the directors that they wouldn't be involved with director or promoter roles for public issuers for five years or accept a CEO or CFO role with a public issuer for three years without the regulator's say-so.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Statistics: Weekly Earnings Rise As More In Full-time Employment

Median weekly earnings from wages and salaries rose by 8.8 percent to $1,189 in the year to the June 2022 quarter, Stats NZ said today... More>>



Bell Gully: Uncertainty Ahead With New Unconscionable Conduct Legislation

new prohibition against ‘unconscionable conduct’ in trade is one of a number of changes to the Fair Trading Act 1986 that come into force from 16 August 2022. The new prohibition may have wide-ranging implications for many businesses... More>>


Statistics: Food Prices Increase 7.4 Percent Annually
Food prices were 7.4 percent higher in July 2022 compared with July 2021, Stats NZ said today... More>>



Westpac: Economic Overview, August 2022 – Pushing Through

The New Zealand economy faces some lean growth in the year ahead as households’ budgets are squeezed, according to Westpac’s latest Economic Overview... More>>


Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>



Retail NZ: Welcomes Return Of Cruise Ships

“Cruise visitors were big spenders in retail prior to COVID-19, and retailers in Auckland will be celebrating the arrival of P&O’s Pacific Explorer this morning... More>>