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Australian investment firm Allco has called time out on its proposed sale of Strategic Finance to a management-led consortium and Strategic's management says it is now less sure the transaction will proceed at all.
Allco HIT, the holding company that owns Strategic, was yesterday placed in a trading halt on the ASX after saying several preconditions for the sale, including a proposed capital restructuring of the company, were unlikely to be met by the deadline of October 31.
"As a result the parties to the sale and purchase agreement are intending to reopen discussions regarding the progress of the transaction." An Allco spokeswoman said a further statement was likely on Friday morning.
Strategic chief executive Kerry Finnigan who - with Strategic's previous owners including New Zealand Rugby Union chairman Jock Hobbs and Bank of Scotland International - is part of the consortium planning to buy the company, said Allco representatives would be in New Zealand today for discussions.
The Business Herald understands Strategic has struck big problems with its exposure to Takapuna's 30-storey Sentinel apartment development.
It is believed several apartment buyers, including that of the $12 million penthouse, have defaulted, leaving developer Cornerstone Group and its financiers a big headache.
Jason Jones of Cornerstone said yesterday that Strategic, ANZ and Bank of Scotland all contributed finance for the block, which was finished months ago.
He referred a query about the Strategic loan repayment to another Cornerstone executive, who said she preferred not to comment on the matter because it was inappropriate.
But Finnigan denied that problems with the Sentinel loan, which he said was not in default, were behind Allco's announcement. It was unlikely that problems with BOS International's parent Halifax Bank of Scotland were the central issue either.
"I don't think you line any one particular point up at this time, there are a number of preconditions that need to be got over the line including funding.
"There are a number of things causing us and Allco concerns. The world's changed in the last week or two and that has everyone concerned."
- Additional reporting Anne Gibson
