Published 26 July 2006
National Finance 2000 Ltd receiver Colin McCloy said today 45% of the company’s $27.4 million loan book was in arrears.
Of the $12.4 million arrears, $9.3 million was more than 150 days overdue, $1.3 million was to customers listed as “gone â€“ no address” and another $1.6 million was listed as loans written off. That left just $251,000 overdue for periods up to 5 months.
“In light of the level of arrears, we believe that the allowance for writeoffs & provisions was inadequate and therefore the $20.1 million book value of the loan book was overstated,” Mr McCloy said in a report to the Registrar of Companies on the receivership, which began on 9 May.
“Our latest estimates are that secured investors could recover 30-50% of their investments (unchanged from the receivers’ original assessment at the start of June). Regretfully, subordinated investors are unlikely to recover anything from the receivership.
“In light of the poor recoveries to investors we have referred the events leading up to receivership to various authorities for investigation.”
Mr McCloy, a partner at PricewaterhouseCoopers, said the timing of a pro rate principal distribution to investors would be determined by the success or otherwise of selling the loan book. The receivers got a large number of unsolicited inquiries, advertised for expressions of interest by 14 July and have told bidders to submit indicative non-binding bids by this Friday, 28 July. A number of bidders will then be asked to complete due diligence and submit legally binding bids.
U column part 2, 28 May 2006: Handful of National Finance investors get money back now
Attribution: Receivers’ report, story written by Bob Dey for this website.