Strategic Finance's trustee, Perpetual Trust, is warning investors not to take up Marchmont Securities Trust “opportunistic” grab for $5 million of debenture stock without obtaining financial or legal advice.Marchmont's offer for 10c in the do
Strategic Finance’s trustee, Perpetual Trust, is warning investors not to take up Marchmont Securities Trust “opportunistic” grab for $5 million of debenture stock without obtaining financial or legal advice.
Marchmont’s offer for 10c in the dollar was likely to “seriously undervalue the amount of each investor’s investment in Strategic,” according to head of the trust’s corporate trust business Matthew Lancaster.
The offer took advantage of the present uncertainties that existed about Strategic’s future, he said.
The trust, as the corporate trustee, is still in negotiations about Strategic’s future after it missed a repayment deadline under its moratorium to 15,000 investors, although Mr Lancaster said an announcement was expected “shortly”.
Perpetual Trust said that investors need to understand that under the Marchmont offer they would:
• receive only 10c for every $1 that they invested with Strategic (that is 90% of the capital that they invested will be lost);
• only receive that 10c in the dollar once a transfer of their investment to Marchmont has been registered, but it is not clear within what period that will occur;
• receive less than 10c in the dollar if Strategic makes a payment to investors before any transfer of their investment to Marchmont has been registered;
• not receive payment of the amounts that should have been repaid to them in September and December 2009;
• not be entitled to any further payment from Strategic at all; and
• no longer be secured debenture holders in Strategic, and so they will be unable to vote at any future meetings of Strategic’s investors.
