UPDATED 2.55PM: Grant Thornton said significant asset realisation should begin in around six months, with approximately 50 loan and farm investments expected to net $20m by mid-2011.
(NBR calculates that this series of sales could provide investors owed $96m with a payment of approximately 20c in the dollar.)
Further realisations would take years, the statutory managers said, as they were tied up in dairy farms whose market was at a low ebb.
More bad news comes from Mr Hubbard's attempts to shore up Aorangi's balance sheet earlier this year by transferring $24m of Te Tua Trust loans into Aorangi.
Grant Thornton said the Te Tua loans were "very poor" and would likely realise just under $7m.
A large series of asset-transfers by Mr Hubbard is also being unwound, as flagged by NBR last week.
"We have previously reported that these dairy farms were transferred by Mr Hubbard to charitable trusts. We have investigated this arrangement and have concluded these transfers are of doubtful validity. A formal annulment process is underway."
Grant Thornton's efforts so far managing Aorangi have cost $769,189, and they note justify the expense: "This is one the most complex cases we have ever seen and as a consequence it has taken enormous effort to protect the interest of investors."
UPDATED 2.25PM: The fourth statutory managers report by Grant Thornton into the financial affairs of Allan Hubbard has painted a dire picture of Aorangi Securities, predicting impairment of 40% and warned investors they should not rely on Mr Hubbard to make up the difference.
The report said that loans and investments made by Aorangi received a quarter of the $3.25m interest expected by September 30, 2010.
“The shortfall has been a trend for some time. The cash received to date is less than half what would be required to meet Aorangi’s interest obligations to investors on the pre statutory management interest payment regime," the report said.
“Total loans and investment arrears are now estimated at $4m and while in the past, Mr Hubbard has been able to use his own assets and cash to make up the shortfall in the income of Aorangi, there is now uncertainty whether investors can rely on Mr Hubbard’s support in the future given his changing financial position.”
The report goes on to state: "While the assets of Mr Hubbard are known, the liabilities are less certain and we are working through, and being made aware of, the full extent of his liabilities."
Adam Feeley, chief executive of the Serious Fraud Office who are conducting investigations into Aorangi Securities, Hubbard Management Funds and South Canterbury Finance told NBR “There are no surprise in there for us.”
Fri, 29 Oct 2010