Receivers appointed to Strategic Finance

Strategic Finance's trustee has appointed receivers to run the finance company.

Perpetual Trust said this afternoon PricewaterhouseCoopers partners John Fisk and Colin McCloy had been appointed receivers of Strategic Finance Limited and related companies Strategic Advisory Limited, Strategic Mortgages Limited, Strategic Nominees Limited, and Strategic Nominees Australia Limited.

Strategic froze repayments to about 13,000 investors owed $417 million in August 2008 and investors then agreed to a moratorium in December 2008.

However, in January it failed to make the first scheduled repayment to investors of 3.4 cents in the dollar, or $12m in total. The missed payment triggered a "review event" under the moratorium and Strategic management has since been in talks with trustee Perpetual Trust about the company's future.

"We will be talking to key stakeholders over the next few days to determine the best way forward," Fisk said.

"As receivers of Strategic, we understand the uncertainty the recent situation has caused to investors and believe the receivership will now provide greater certainty. It is too early to release any further details, but we are working as quickly as we can to determine the best option going forward to ensure maximised funds are distributed to investors."

He said the receivership also brings certainty to about $5.2 million of unsecured creditors' claims that were not subject to the moratorium and provides options to review cost structures not available to management under the moratorium.

"We will provide a report to investors as soon as we possibly can. However, in the meantime we've set up a dedicated help line and web page to allow investors to ask questions and find out more information," Fisk said.

In January, Strategic also announced its total loan book value, net of provisioning, had fallen below 75 percent of the aggregate principal monies owed to debenture holders, depositors and subordinated note holders, also a review event under the moratorium terms.

Strategic, which lent money to property developers working on the likes of Auckland's Soho Square project and the Hilton Hotel in Fiji, has repaid $25m of principal plus $3m of interest to financier Bank of Scotland International. This debt ranked ahead of debenture holders.

Earlier this month Strategic released unaudited results for the six months to December showing an after tax trading loss of $99.8m and a bottom line loss, excluding provisions, of $32.8m.

Sharemarket operator NZX has suspended trading in Strategic's debt securities until further notice.

Are you with Strategic Finance? Email: Businessday@dompost.co.nz

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