KEY POINTS:
Just days before its trustees decide whether or not to call in the receivers, stricken Dominion Finance Holdings has revised its March year result from a previously advised net profit of $8.95 million to a $108 million loss.
Dominion, which owes 13,000 debenture investors $276 million, finally filed its annual report with sharemarket operator NZX yesterday after weeks of delays that resulted in a temporary suspension of its shares.
The news, however, was not encouraging for investors.
After freezing repayments to investors in June, the company had proposed a recapitalisation plan. That proposal was rejected by Dominion's trustees last week partly because it did not have the backing of bankers ASB Bank and Halifax Bank of Scotland who are owed $90 million.
Unable to proceed with the plan, the company has been forced to write off $26.6 million in goodwill and intangibles.
Since May, when the company released its unaudited results, "the demise of asset values accelerated beyond expectation", chairman Rick Bettle said in a statement.
"Having regard to current market conditions, we have now increased the level of bad debts and provisions substantially to $80 million."
The company has also been obliged to take a $25.5 million hit to both its bottom line and its receivables book under International Financial Reporting Standards relating to future interest flows.
"This non cash effect is neutral over time but severely impacts these accounts," Bettle said.
NZX last week confirmed it was continuing to investigate whether Dominion had complied with its continuous disclosure requirements ahead of the June announcement.
In spite of the loss announced yesterday, Bettle and chief executive Paul Cropp said there was still at least some chance debenture investors could get all their money back in the "orderly wind up of assets" they are proposing as an alternative to receivership.
"Based on recovery of the discounted interest in line with loans being recovered, no further detrimental market changes and the remaining part of the unimpaired loan receivables performing as planned, then debenture holders and banks may be well be repaid in full (although there is no guarantee)," they said.
Dominion lent money to property developers through its subsidiaries Dominion Finance Group and North South Finance and was squeezed between plummeting debenture reinvestment rates and a property market slump which many market insiders believe has some way to run.
Yesterday, Dominion Finance Group trustee Louise Edwards said she and North South trustee Graham Miller had been supplied "with a high level proposal on a staged wind down which we are evaluating against the alternative of a receivership".
Having traded as high as $1.63 less than a year ago, Dominion Finance Holdings shares closed untraded at 2.5c yesterday.
