KEY POINTS:
The sale by Australian investment company Allco HIT of Strategic Finance's parent, Strategic Investment Group, is off.
Strategic Finance said today it understood that satisfying some of the conditions of the sale and purchase agreement had not been possible.
That was mainly due to recent events in credit markets adversely affecting the outlook for the New Zealand property finance sector.
Under a deal announced in September, Strategic Investment Group was to be bought by Clarence Investments, which is 80.01 per cent-owned by the previous owners and senior management of Strategic Finance.
Uberior Ventures Asia, an investment vehicle of BOS International (Australia), was also an investor.
Strategic, whose directors include New Zealand Rugby Union chairman Jock Hobbs, has suspended redemptions, affecting 15,000 investors with $325 million of funds.
Today Strategic said it would continue to work with Perpetual Trust, BOS International and Allco HIT as to the best course of action for Strategic Finance and its investors.
"The sale transaction and the capital restructure proposal as previously disclosed to the market will not proceed as originally contemplated."
Yesterday Allco HIT had advised that completion of conditions on the deal was unlikely by October 31, and that the parties to the sale were intending to reopen discussions regarding the progress of the transaction.
BOS International is the structured lending division of HBOS Australia, which is part of Halifax Bank of Scotland (HBOS).
HBOS is one of the banks being bailed out by the British government. HBOS is being taken over by Lloyds TSB in a move which has outraged the Scottish establishment.
The Strategic Finance transaction had been conditional among other things on a capital restructure of Strategic Finance involving new funds being introduced by the consortium and additional funding lines provided by BOS International (Australia).
- NZPA
