Strategic Finance Ltd’s receivers said in a letter to investors yesterday they have received the full $22 million they sought from the group’s directors & auditors.
The receivers expect to make a distribution of 2c:$1 around Wednesday 17 December, taking the total distribution to secured debentureholders to 16c. A further distribution in the first half of 2015 will be subject to 2 property loan settlements being concluded.
The settlement agreement, reached in June, went unconditional in August, when the first $10 million was paid, and 2 payments of $6 million followed.
The receivers, PwC partners John Fisk & Colin McCloy, said they still expected recoveries to remain in the 17-21% range of the principal outstanding to secured debentureholders at the date of receivership, March 2010.
When the settlement was first announced, the directors also gave the Financial Markets Authority an enforceable undertaking that they wouldn’t, without the authority’s prior written approval, act as a director or promoter of a public issuer of securities for 5 years, or accept appointment or employment or act as a chief executive or chief financial officer (or equivalent position) of a public issuer of securities for 3 years.
The directors who were the subject of the authority’s claim and who provided undertakings are chief executive Kerry Finnigan, Graham Jackson, Marc Lindale, Timothy Rich, chairman Denis Thom & David Wolfenden.
Strategic placed a trading halt on all its securities on 7 August 2008, and trading in them didn’t resume. In December 2008 the company entered a 5-year moratorium and in March 2010 the company’s trustee, Perpetual Trust Ltd, appointed the receivers. Liquidators were appointed in July 2010.
When the receivers were appointed, Strategic owed 10,000 investors in secured debentures $367.8 million on 12,900 investments. At 31 October 2008, Strategic had a loan portfolio with a net book value after provisions of $478 million, spread over 100 loans. On 1 March 2010, total assets were halved from a year earlier – from $463 million to $234 million – but total liabilities rose by 3% to $435 million, taking shareholders’ funds from a positive $41 million to a negative $201 million.
Attribution: Receivers’ letter.