Receivers expect Strategic loan book sale next month

Receivers expect Strategic loan book sale next month

Strategic Finance's receivers say they have received a "good" response from bidders for the failed property lender's loan book, but they don't expect to finalise a sale until next month.

On their website PricewaterhouseCoopers' John Fisk and Colin McCloy say despite the good response from interested parties with indicative bids due yesterday, a number of Strategic's loans were complex and would require more due diligence from would-be buyers before final offers are made.

"Accordingly, the receivers don't expect to have a final position on a sale until next month," PwC says.

In a May letter to investors the receivers said the property loan book consisted of 87 loans with a total net book value of NZ$229.1 million.

Strategic had about 13,000 investors with investments of NZ$417 million in December 2008 when they voted for a moratorium that aimed to repay them 100% of their principal investments plus interest through asset realisations. At that time the loan book was valued at NZ$477 million. 

Strategic's trustee Perpetual Trust called in the receivers in March after Strategic failed to generate sufficient loan recoveries for a repayment that had been due to investors in January. Strategic also revealed in January that its total loan book value, net of provisioning, had fallen below 75% of the aggregate principal monies owed to debenture holders, depositors and subordinated note holders. Both of these were ”Review Events” under the terms of the company's moratorium.

Meanwhile, the receivers said they were also aware of a number of unsolicited offers made to buy Strategic debenture stock. Fisk and McCloy said it was too early for them to give any guidance on the likely return to Strategic investors so the true value of their stock was unknown. They also pointed investors to comments from the Securities Commission warning them to be wary of low ball offers.

Interest.co.nz's Deep Freeze list of finance company failures shows over NZ$6.6 billion has been frozen in almost 200,000 accounts since the crisis began in 2006.

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