Are you affected by the Bridgecorp collapse? Tell us your stories
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Investors in Rod Petricevic's Bridgecorp are facing a nervous wait as receivers get to grips with the scale of the problems that led to the $600 million finance company's failure yesterday.
The company last week failed to repay principal to a number of its debenture stock and capital note investors, and last night John Waller and Colin McCloy of PricewaterhouseCoopers were appointed as receivers following discussions with Bridgecorp trustee Graham Miller.
Waller said there were a number of breaches of the company's trust deed which specifies how much assets it must hold to back its borrowing, as well as immediate cashflow problems.
He said the company and its subsidiaries owed debenture stock investors about $470 million and unsecured lenders about $30 million.
Last night Waller said it was too early to tell the size of any shortfall.
PricewaterhouseCoopers has set up a website to provide information for investors.
Bridgecorp had been the subject of speculation for some time, particularly after Australian property developer Westpoint, to which it had exposure, collapsed last year.
That led to the Australian securities regulator ASIC ordering it to repay money to investors in that country and to cease raising funds there.
Bridgecorp went on to use New Zealand investors' money to meet its commitments in Australia.
More recently, it said it was owed $49.1 million by Fijian-registered company Matapo which had been developing a resort and homes at Momi Bay, south of Nadi.
But the development and repayment of those loans was disrupted by the Fijian coup in December.
"The cumulative effects of the much-publicised Australian and Fijian situations have undoubtedly put pressure on the company," Petricevic said at the company's interim result in March.
"But there are strategies in place to ensure that the next 12 to 18 months sees the company operating back close to previous levels." He was not available for comment yesterday.
With about $600 million in total assets, Bridgecorp, primarily a property development financier, is the largest finance sector casualty in recent years.
Last year used-car finance companies, National Finance 2000, Provincial Finance, and Western Bay Finance failed, owing investors a total of just under $400 million.
But Bridgecorp's failure may have wider implications for the industry. It has had complex shareholder relationships with other major finance companies, NZX listed Dorchester Pacific and Wellington based St Laurence.
A complaint from the Shareholders Association earlier this year about the deals between the companies was rejected by the Takeovers Panel.
Recently Bridgecorp sold its 18 per cent stake in Dorchester Pacific to a number of other parties, including St Laurence. Most of those shares had previously been security on a loan St Laurence made to Bridgecorp.
Aucklander Graeme Bond had $10,000 invested in Bridgecorp debenture stock which had matured on June 23 but by yesterday had still not been paid out and was dismayed to learn it had been placed in receivership.
After leaving a message with the company yesterday he was contacted and told it had been experiencing "some difficulties" but his money would be paid "by the end of the week".
