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Investors in Rod Petricevic's failed Bridgecorp could recover as little as 25c in the dollar and will have to wait six months to receive anything, the company's receivers said yesterday.
John Waller and Colin McCloy's initial review of Bridgecorp's finances has revealed it was in worse shape than initially thought.
They also uncovered potential breaches of the Securities Act.
The pair said investors would likely recover 25c to 74c in the dollar of their investment. That money would be paid out as Bridgecorp's 69 loans, worth $393 million, were recovered.
"As a result it would be prudent to assume that they will not obtain any recoveries in the next six months."
Pensioner Don Jefferies, who sank $5000 in the company days before its fall, said: "There must be a number of people who feel aggrieved that their money was taken [by Bridgecorp] at the 11th hour."
Alex Tee, who had $60,000 in Bridgecorp, said he was pleased he would get something back. He was prepared to wait longer to recoup as much money as possible.
The review acknowledged the wide range of potential returns but said there remained "considerable risks and uncertainties relating to the recoverability of significant loans and receivables".
Bridgecorp, in receivership since July 6, lent mostly to property developers but struck trouble after some projects, including one in Fiji, defaulted on repayments.
Many of Bridgecorp's better-quality loans had been sold to cover payments to investors, who are owed $458 million, "leaving a loan book which is much more difficult to recover".
The wide range also reflected Bridgecorp's $151.7 million in overseas loans, mostly to Fijian and Australian developers.
If fully recovered, those loans would represent 34c of the 74c upper payout range. However, "the level of recoverability is subject to a number of issues, including political uncertainties", said Mr Waller and Mr McCloy, of PricewaterhouseCoopers.
They said their analysis showed the company's exposure to bad loans was much worse than indicated in management's June 30 balance sheet.
The Herald understands the possible breaches of the Securities Act referred to the Securities Commission relate to the company's prospectus not being a true representation of its financial position as it continued to accept funds in the months leading up to its collapse.
It also has about $30 million in unsecured capital notes on issue.
The receivers will contact debenture stock investors this week.
