KEY POINTS:
Strategic Finance investors should get all of their principal back in a moratorium arrangement being drafted by management the company's chief executive, Kerry Finnigan, said yesterday.
Strategic froze repayments to 15,000 investors owed $325 million in August. It is seeking approval for a managed wind-down of its loan book as an alternative to receivership after a proposal by a management-led consortium to buy the business from troubled Australian investment company Allco HIT fell through last month.
"We're clearly disappointed with the position that we're in at the moment with regards to the consortium," Finnigan said yesterday.
Nevertheless, management's work on a moratorium proposal was well advanced and initial documentation had been sent to trustee Louise Edwards of Perpetual Trust.
Finnigan said it was hoped material would be with investors in time for them to vote on the proposal before the Christmas break.
"I'm pretty confident we will get there."
He said there was nothing so far to suggest investors would receive anything less than full repayment of their principal. "But ... if we're forced to sell things and act inappropriately, there may be some potential for loss. At the moment all the numbers are indicating that investors should receive full repayment."
Edwards yesterday confirmed Perpetual had appointed PricewaterhouseCoopers to evaluate Strategic's proposal against receivership, "so that we can then evaluate what is the best way forward in terms of the outcome for investors".
The process was being advanced as quickly as possible with Edwards saying she was mindful of the now considerable delays in putting other finance company moratorium proposals to investors.
Edwards is the trustee for United Finance, the sister company of Hanover Finance. When the two companies froze repayments to 16,500 investors owed $554 million in late July, they said a restructuring proposal would be put to investors in late August. Two months later investors are still waiting.
"It has been disappointing how long it's taken but it is a complex structure," said Edwards. "It requires the involvement of multiple parties and everyone involved is working flat out to clear a number of issues."
The Business Herald understands both United and sister company Hanover Finance are close to finalising documentation for investors but it may now be early December by the time they get to vote on the proposal.
Edwards is also the trustee of St Laurence Finance, another finance company readying a moratorium proposal.
"It's progressing well," she said yesterday. "We've had a series of meetings and are just clarifying a couple of points."
THE BIG CLEAN-UP
* Strategic Finance says investors owed $325 million should get all of their principal back if the company's moratorium proposal is approved.
* Meanwhile investors are still waiting on other finance company moratorium proposals including the $554 million Hanover/United Finance plan.
* A December vote on the Hanover proposal, originally scheduled for late August, is looking increasingly likely.
