Strategic Finance spirals $16.1m further into debt
Strategic Finance has fallen further into debt as it prepares to announce details of a proposed restructure.
The company has reported an (unaudited) after-tax trading loss of $99.8 million to December 2009 - $16.1 million higher than it forecast in January.
Then, the record $84 million loss expected meant the company’s loan book would be more than 75% less than what it owed to investors – triggering a second review event.
The $99.8 million loss compares to $32.8 million for the six months to December 2008.
Strategic Finance said in a statement this morning the review event under the terms of its moratorium and subsequent discussions had delayed its half-year audit.
The board expected KPMG to finish the audit by March 31.
On Friday, the National Business Review reported that Strategic Finance had until the end of the day to present its best proposal to the trustee, Perpetual Trust’s Matthew Lancaster.
Mr Lancaster confirmed Strategic had been talking to several unnamed parties about a debt-for-equity swap or “restructure”.
“Once we have their best proposals, we can assess that against the other options, such as receivership.
“We need to know what proposals any other party has come up with,” he said.
Strategic's chief executive Kerry Finnigan told NBR it hoped to demonstrate an outcome for investors better than the alternative of receivership.
The company owes debenture-holders about $280 million, bond-holders $23 million and perpetual shareholders $50 million.
Today Strategic Finance said it expected to provide an update “shortly”.
The company reported total assets of $233.7 million (compared to $463.2m in the same period last year) and $434.4 million in liabilities (compared to $422.5m). Its gearing ratio was -85.97%.
Operating expenses were up from $59 million to December 2008, to $125 million to December 2009.
Strategic wrote off $15 million of bad debts for the period, compared to $32 million for the same period in 2008.
It had $5.8 million in cash (or cash equivalent) at the end of the period.
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Comments and questions16
Well they would.. want any alternative to receivership, so as to avoid examination of recent lendings including (historically)related party transactions and the like. Usually reliable sources say that these related borrowers are hanging their hats(equity) on a further write down of the book as their only escape.
i am reliably informed that the directors of strategic have been doing deals with the 1st mortgagees of alot of the properties tahy have 2nds on and buying them into trusts and wifes names etc. This effectively blows off the 2nd charge and the poor debenture holders miss out again. The are busy thinking of themselves first and lining thier own pockets and protecting their wealth. Where is the trustee is all this, bet HBOS dosnt know about this?? they are crooks just like the rest.
Hoped it would be better than receivership, yes, but what Kerry left off his comment was that it was HE who would be better off.
High wages continue, bad news continues, same people same result.
Even Allied has coe to realise that the mortgage books of these finance companies are a tangled web of dodgy deals.
I hear the directors were all enjoying themselves at the wellington sevens , they must still think the cash is theirs to spend . When will the government, the trustees and the debenture holders wake up......
That's a good one guys expecting the government to do something about our financial system.
The best national can come up with is more tax cuts for their rich buddies while the rest of NZ gets increased GST..... during a recession!
It is a sad indictment on our country, but it really is full of crooks.
This Govt, like all those before it for that matter, have repeatedly shown they have no interest in white collar crim's (read finance company mgmt) who rip people off and really believe that all that money is their s to spend as they wish.
It is all just way too hard. Even the agencies in place find it all too difficult.
So, of course they will continue to do what they like until the money has run out. Oh, not forgetting the money they no doubt have stashed away somewhere.
It must be galling last year for investors to have seen three of the directors responsible for this debacle, leave the sinking ship and then set up another operation. And by the way, next time you see one of these jokers driving their new Aston Martin around town with (pathetically) an 007 number plate, you know what sort of wave to give him.
Thank you Cullen and clark for letting this all take place without regulation and claiming the credit for the smoke and mirrors growth you thus achieved.Key - you need to avoid the same trap and actually do something. A good start would be the Commerce Com reocmending prosecution of ANZ and ING Directors for their falsehoods - but they won't will they. I note ANZ are looking to avoid ING fallout by a further flick on.PUT A STOP TO THESE THIEVES NOW!!!!
Forecasting a loss of $83.7m in January to then revise this to $99.8m 30 days later !! Forecasting my arse.. this is nothing more than gross ineptitude. Receivership please ! Who can believe any recommendations by Finnegan that are otherwise !
The credibility of the trustee is on the line here too.
G M Edwards
Worrying about tax cuts for 'the rich' is the wrong end of the stick as they contribute the bulk of the government's misspent revenue.
600,000 income earners pay no tax at all !
Who are the crooks then ?
what about the shadow receiver? what is he up to? surely these clowns are not actually still in charge? also what about the "buffer" level - the place in the business where it looks like certain interests have more place than the bank (directors & shareholders)? seems like the lads are hanging on at all others expense
Surely the authorities, Trustees and HBOS won't let these crooks off with another Allied/Hanover style deal.
Put it in Statutory Management and find out once and for all exactly what has happened and make sure not one cent reemed off by the crooked directors, senior mangers and consultant is not accounted for?? Enough is enough.
Time for John Key and Bill English to front up and show us all that they have big kahuna's and have the ability to make the right decision. This is another Equiticorp and a lot of these clowns were involved in that disaster also.
ENOUGH IS ENOUGH
KEY AND ENGLISH - ARE YOU NOT LISTENING !!!!!!!
THIS NEEDS ACTION NOW .TODAY.THIS IS BROKE FIX IT!!!!
Shareholders and directors in Strategic own the Auckland premisis and are renting it to Strategic for $600,000 pa when the market rental is about $250,000 why does the trustee approve of this!
And their new company Triumph Capital rents most of the space in Strategics building for about $20,000 pa
How does that work and how can the board agree to this or the Trustee or HBOS
When will this all be put to bed and sanity prevail
Maybe it won't because all involved - directors senior management, Trustees, HBOS are all involved and tainted.
they have a big debt. i don't understand how they reached this sum. i understood that they can access programs like blair rewards program, for discount or to take a part of the debt with some condition. it is a step to out of hole.
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