Investors' wait almost over

The grinding wait for investors in failed finance company St Laurence to find out exactly how much they have lost is almost over.

Investors have been told the receivership could end in March. They have been sent "before and after" photos of the company's last remaining asset - an asbestos-clad glass recycling building in New South Wales - where hundreds of tonnes of crushed glass and scrap metal had to be laboriously removed before the vast industrial property could be marketed.

St Laurence receiver Barry Jordan, of Deloitte, hopes a deal to sell the former recycling plant in Campbelltown, Sydney, will be signed shortly, allowing the receivership to be wrapped up in March.

The former property owner had been recycling glass and scrap metal on the site but the glass mounted as customer demand dried up due to the end of a government-sponsored home-insulation subsidy. Efforts to sell the recycling company as a going concern failed and the receivers ended up having to clear hundreds and hundreds of tonnes of crushed glass and scrap.

Jordan expects the sale will deliver another 2 cents in the dollar to investors but that could still mean final losses will add up to about $230 million. The receiver has returned 14 cents in the dollar to debenture investors so far and at the end of October they were still owed $225m.

Capital noteholders owed more than $12m won't get anything back. Most investors bought their debentures direct or through financial planning firms such as Vestar.

The finance company, founded by the now bankrupt Kevin Podmore, specialised in property lending and development. Expansion into lending in Australia has been one of St Laurence's big mistakes.

Investors agreed to a moratorium in early 2008 which temporarily saved the company after they were told it would endeavour to return every last cent by 2021. Those at the meeting gave Podmore a standing ovation. But the company tipped into receivership two years later after debentureholders had received only 10 cents in the dollar back and unsecured noteholders just five cents. Podmore made a last-ditch attempt to have debentureholders swap their debentures for shares, a deal the trustee Perpetual refused.

In the past year the receiver has handed over reams of information to the Financial Markets Authority, which is continuing an investigation into St Laurence.

- © Fairfax NZ News