Gloom for Provincial investors

Four hundred investors holding $17 million worth of redeemable preference shares in crippled Provincial Finance will not see a cent of their investment back unless the company can be put back on its feet, receiver John Waller says.

Waller, of PricewaterhouseCoopers, told the investors yesterday that they rank behind debenture stock holders and all of Provincial's other creditors with the exception of the company's ordinary shareholders.

"Regrettably, unless a restructuring is successful it is highly unlikely that redeemable shareholders will receive any return on their investment," he said.

Yesterday, he said the redeemable preference shares had a total nominal value of $17 million. About $11 million were held by retail investors, some of whom are also debenture stock holders. The rest are held by related parties.

Waller told the investors he was in discussions with ordinary shareholders, "and a number of industry participants", about a proposed restructuring plan for the company. The plan was contingent on the quality of Provincial's loan book, and would take time to develop.

Christchurch-based Provincial was placed in receivership last month owing 14,000 debenture stock holders $324 million, after thousands of loans it made on used cars went bad.