Aust investment company in huge loss

Across the Tasman, receivers have been appointed overnight to Great Southern Ltd, a timber, cattle and grape investment company that raised over A$1.8 billion from investors over the last 5 years, the Sydney Morning Herald reported.

It had asked for A$35 million to tide it over, but its banks, which include ANZ. Commonwealth Bank, BankWest and Mizuho, said no. These banks are owed A$376 million, with ANZ most exposed with A$220 million. This collapse follows the recent collapse of a similar scheme known as Timbercorp.

The four banks are owed A$376 million by Great Southern Ltd, with McGrathNicol indicating yesterday that they had security as creditors over its major assets, thought to be its land holdings.

Another syndicate - also led by ANZ and including Bank of Scotland International, GE Capital and the Singaporean bank United Overseas - lent A$223 million to the responsible entity.

The banks have executed their security over the company's assets, but yesterday's move only heightens the concerns of Great Southern's 43,000 investors in its 45 managed investment schemes.

- INTEREST.CO.NZ