More bad news for Strategic Finance investors
Strategic Finance is in negotiations with its trustee, Perpetual Trust, after the company confirmed it is unlikely to meet a repayment deadline tomorrow.Its 15,000 investors, owed a collective $325 million, were warned in December it would not be plain sa
Wed, 06 Jan 2010
Strategic Finance is in negotiations with its trustee, Perpetual Trust, after the company confirmed it is unlikely to meet a repayment deadline tomorrow.
Its 15,000 investors, owed a collective $325 million, were warned in December it would not be plain sailing and they might not get paid when expected.
Chief executive Kerry Finnigan then told NBR its loan books had $500-odd million on them, which was not likely to come in overnight.
In a letter to investors yesterday, Strategic chairman Denis Thom said the company did not have the required cash because conditional and unconditional sales needed to enable loan repayments had not been settled.
However, it was pleased to confirm that a $25 million Bank of Scotland International (BOSIAL) debt facility had been fully repaid, he said.
The board was “very disappointed” it was not in a position to make the first repayment to stockholders.
“Given this position the SFL board has informed the trustee it considers it likely that a review event under the moratorium arrangements will occur on January 7, 2010 and this has already resulted in the commencement of constructive dialogue between the company and the trustee.”
He said it was likely negotiations would take more than a 14-day period allowed under the moratorium agreed in December 2008 to make sure all options were analysed.
The company would meanwhile focus on generating proceeds to be able to repay investors and everything above working capital could be returned to investors now the BOSIAL debt had been repaid.
Wed, 06 Jan 2010
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