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
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.
