NZF Group says the board of its property lending subsidiary NZF Money has asked its trustee Covenant Trustee Company to appoint a receiver.

NZF Group said in a statement to the stock exchange that the NZF Money board had explored various options for a short-term funding solution.

"After giving the matter considerable thought and taking into consideration developments over the last couple of days, the board of NZF Money do not believe that such a short-term solution is in the best interests of NZF money or its investors," the company said.

"Accordingly, the Board of NZF Money have requested NZF Money's trustee, Covenant Trustee Company Limited, to appoint a receiver. Further announcements will be made in due course."

The move comes after NZF Money was forced yesterday by the Financial Markets Authority, which raised concerns about NZF Money’s disclosures of asset quality and liquidity, to pull its prospectus meaning it can no longer raise money from the public. NZF Money also said yesterday it was working through options to address the impact of an expected NZ$3.5 million contract between one of its borrowers and a buyer not settling as expected.

NZF Money had secured debenture stock of NZ$18 million as at June 24 this year and isn't subject to the extended Crown retail deposit guarantee scheme. See more here.

The sharemarket listed NZF Group also owns 50% of Mike Pero Mortgage Holdings. At March 31 the NZF Group had cash of NZ$5.65 million and total undrawn term loan facilities of NZ$116.4 million with Westpac, from a total loan of NZ$225 million. NZF Group sold its 70% stake in Finance Direct on March 30.

NZF Money's prospectus shows a debenture reinvestment rate for May of 51.94% and average for 2011 at 48.76%. As of June 24, the property lender had total loans and advances to customers of NZ$29 million with loan impairments at NZ$3.7 million with potential for another NZ$2 million, and total equity of NZ$10 million.