Boost for Provincial investors

Solid repayments of the $300 million owed to failed used car finance firm Provincial Finance have enabled a better-than-expected initial return to investors and have increased chances of a sale of assets, says receiver John Waller.

Waller, of PricewaterhouseCoopers, yesterday said investors would be paid 25c for every dollar owed to them by Provincial on September 29.

The initial repayment is significantly higher than the 10c to 20c previously indicated.

"We've had some good wins. The team at Provincial is doing a good job in chasing up the debts. Really we are pleased with progress to date," said Waller.

"We're collecting probably $2 million to $2.25 million a week in principal and interest so cash flow is still quite strong," said Waller.

In addition, asset sales and tax recoveries had boosted the amount available for distribution to investors.

Waller restated his view that Provincial's 11,000 investors would eventually get "most, if not all" of their principal back, although that might take some time.

After the initial repayment later this month, Waller said, investors could expect to receive about 10c in the dollar on a quarterly basis.

He downplayed speculation that Provincial may eventually be in a position to pay interest on the principal to debenture stock investors. That was "unlikely".

Waller said he was still talking to "a number of parties" about either getting the company back in business or the sale of some of Provincial's assets including its loan book.

As loans were repaid the size of the book came down.

Christchurch-based Provincial was placed in receivership in early June, owing debenture stock investors about $300 million.