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

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>