Strategic Finance's loan book is up for sale, receivers said today.PricewaterhouseCoopers, receivers of the second biggest finance company to collapse in this country, has written to investors today to update them on the state of the collapsed financier.T
Strategic Finance’s loan book is up for sale, receivers said today.
PricewaterhouseCoopers, receivers of the second biggest finance company to collapse in this country, has written to investors today to update them on the state of the collapsed financier.
The firm’s partners John Fisk and Colin McCloy said they had received several expressions of interest regarding the purchase of Strategic’s loan book – in full or part.
PWC’s wider network in Australia and Asia had also been contacted to identify other potential interested parties, they said in the letter.
“We will be running a formal sale process with indicative offers for the loan book, due by mid June 2010. This will enable the receivers to assess the level of interest in the loan book and any indicative offers against the expected realisations in the receivership.”
With the sale process underway, receivers would not announce a potential recovery range for secured debenture investors as this could be affect negotiations with interested parties.
“Any potential recovery range will not be announced until after the sales process has been completed.”
Mr Fisk and Mr McCloy were appointed receivers of Strategic Finance on March 12, ending the moratorium, which had been in place since December 2008.
Strategic is the second biggest finance company collapse after Bridgecorp, which owes $459 million.
The letter provided draft accounts for the company as at February 28, revealing Strategic's 13,000 investors are owed $452 million -- higher than early estimates of $417 million.
Those investors have not received any payment from Strategic Finance for more than 18 months.
An unaudited balance sheet revealed total assets of 240.5 million. The major asset is the property loan book, of 87 loans worth $229.1 million.
Most of the property securing the loans is in Auckland (33%) and overseas (27%).
The lending is primarily secured over development land in commercial (38%) and residential (24%) developments. In the majority of instances, there are prior ranking charge holders and further development funding is required to complete the development.
For more than a quarter of the loans, the borrowers were in liquidation, receivership or the property owned by the borrower was in the process of, or has been sold by the mortgagee.
Strategic had $4.9 million in the bank – an amount not sufficient to enable a payment to be made to secured debenture investors – owed $367.8 million.
Mr Fisk and Mr McCloy said they were working hard to recover the loans in an efficient and timely manner so that a distribution to secured debenture investors could be made as soon a possible.
Expected to issue a further report by the end of July – when it hoped the outcome of the sales process and more information about future distributions would become clear.
Government authorities would be notified of any potential breaches of legislation or Strategic’s trust deed that come to the receiver’s attention during their investigations, the letter said.
PWC said ongoing employment had been offered to six Strategic full-time staff members and four casuals. PWC had also retained specialist property and legal advisers to help with their analysis.
