St Laurence secured debenture holders are likely to get back between 15 cents and 22c in the dollar over the next 18 months, receivers Deloitte say.
(Update adds detail about the loan book).
Meanwhile St Laurence managing director Kevin Podmore and associated companies will also be pursued over guarantees they provided in 2008 that they would cough up as much as NZ$20 million if the property financier was placed in receivership.
In a letter to investors receivers Barry Jordan and David Vance of Deloitte say the 15c to 22c in the dollar, with an initial payment in January, is in addition to the 10c they received under St Laurence's moratorium.
"It will be subject to securing an orderly realisation of the remaining management contracts, sale of the National Property Trust units and no further adverse movements in the property sector," Jordan and Vance said.
"In addition to the estimated range above, the receivers will also pursue the guarantees provided in 2008, however under the terms of these guarantees they can only be called 15 months after the receivers were appointed."
Jordan and Vance added that It was unlikely there would be any money available for the repayment of interest to secured debenture stock holders or for the repayment of the capital notes or any St Laurence unsecured creditors.
The receivers said St Laurence's assets included a loan book with a face value of NZ$74.7 million before provisions. All but one of the loans in the book was in default on the day of Jordan and Vance's appointment. They said they had continued and intensified recovery and enforcement action.
St Laurence, owing 9,000 investors NZ$245 million, was dumped into receivership by its trustee Perpetual Trust in April. The receivership came after Podmore proposed a debt for equity swap to try and stave off receivership. Perpetual's Matthew Lancaster warned if the proposal went ahead it would release Podmore from his personal guarantee.
Podmore and associated companies provided a guarantee to debenture holders in St Laurence's 2008 repayment plan setting out that if St Laurence was placed in receivership or liquidation they would pay up to NZ$20 million of any money owed to investors. However Podmore told interest.co.nz in April he personally only had "minimal" assets left and the company guarantors only had about NZ$4 million of shareholder funds.
St Laurence investors voted in December 2008 for a moratorium which gave the company until 2013 to pay back much of the monies owed. The balance owed to investors might not have been paid until 2021 in some cases, and 2034 in others. At the time of its receivership St Laurence had paid back NZ$30 million but had indicated it would soon become insolvent.
The St Laurence owned manager of the National Property Trust, facing a revolt from unitholders led by David Cushing, last week agreed to surrender its management contract for just NZ$2.5 million and sell its near 16% stake in the listed property trust for about NZ$16.3 million.
Read Deloitte's statement below:
The receivers for St Laurence Limited and six of its subsidiaries have written to investors with an update on progress since they were appointed by Perpetual Trust on April 29 2010.
The letter, from receivers Barry Jordan and David Vance of Deloitte, outlined what work been done so far to recover funds for investors, an assessment of any likely asset realisations and the anticipated level and timing of any distributions to investors.
The receivers have provided investors with an estimated outcome that is as reliable as possible subject to the uncertainties inherent in the property market and the already impaired state of the St Laurence loan book.
The current best assessment indicates that secured debenture holders can expect to receive a distribution of between 15 cents and 22 cents in the dollar over the next 18 months.
It will be subject to securing an orderly realisation of the remaining management contracts, sale of the National Property Trust units and no further adverse movements in the property sector. In addition to the estimated range above, the receivers will also pursue the guarantees provided in 2008, however under the terms of these guarantees they can only be called 15 months after the receivers were appointed.
This expected distribution is in addition to the 10 cents in the dollar paid out to debenture holders under the moratorium repayment programme prior to St Laurence going into receivership.
It is not expected that there will be any funds available for the repayment of interest to secured debenture stock holders or for the repayment of the capital notes or any St Laurence unsecured creditors. The next communication to investors is scheduled for December 2010, which will provide an update on the receivership progress and the timing of any proposed distributions.
At this stage, the receivers hope to be in a position to make an initial distribution in January 2011.
The receivership covers St Laurence Limited, Direct Property Investments Limited, SL Five Star Hotel Investments Limited, St Laurence Lending Limited, St Laurence No. 2 Limited, St Laurence No. 3 Limited, and St Laurence Realty Limited. It does not involve Irongate Property Limited, St Laurence Property Development Fund, or Direct Property Investments No. 6 Limited.