Finance company St Laurence says it can no longer meet its scheduled moratorim payments and is putting forward a proposal for investors to swap debt for equity in a related company.The board said today that St Laurence would soon run out of equity due to
Finance company St Laurence says it can no longer meet its scheduled moratorim payments and is putting forward a proposal for investors to swap debt for equity in a related company.
The board said today that St Laurence would soon run out of equity due to the “extremely difficult” property market. Managing director Kevin Podmore said in a letter to investors the company would soon become insolvent.
St Laurence has commissioned an independent report from Grant Samuel on a plan that would see investors exchange their debenture stock and capital notes for shares in St Laurence Holdings Ltd, a company set up to acquire St Laurence’s assets.
St Laurence owes about $240 million to investors, who voted in favour of a moratorium in June 2008.
To date the company has made five quarterly payments of 2c each under the moratorium.
St Laurence managing director Kevin Podmore said if this proposal was not approved, the company would be placed in receivership.
“We appreciate this is not what investors signed up for, nor the outcome we had hoped for when we put forward the recapitalisation plan in 2008.
"We understand that investors want their money back and in the current market we sincerely believe that exchanging their debt investment for equity is the best way to achieve this.
"It will allow us to complete our selldown programme in an orderly manner but, more importantly, preserve the value of SLL’s funds management business and hence provide a better outcome for our investors.”
