KEY POINTS:
Strategic Finance Ltd, which says on its website it is a leader in the financial services field, has suspended redemptions of its secured debenture stock and subordinated notes, effective today.
Strategic Finance has also ceased accepting subscriptions for debenture stock and subordinated notes under its current prospectus and investment statement.
The announcement came after a halt was placed on trading in the securities of Strategic Finance listed on the NZDX market earlier today.
In the middle of last month, Australian owner Allco HIT announced a consortium including senior management was planning to buy Strategic Finance.
Strategic said in a statement today that as announced on July 17 a consortium consisting of the original owners, senior management and BOS International has entered into negotiations for the acquisition of Strategic Investment Group Ltd, the immediate parent of Strategic Finance.
"Those negotiations have been ongoing and the board of Strategic Finance understands that in addition to a change of ownership the transaction will involve a capital restructure."
The capital restructure will have to be considered by securityholders of debenture stock, subordinated notes and perpetual preference shares.
"While the negotiations have been continuing there has been a further material decline in the property finance market sector and reinvestment rates."
It had been decided to put the suspension in place to protect the position of investors.
The company would make a further announcement tomorrow.
About 25 finance companies have collapsed in New Zealand in the last two years.
- NZPA
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