Strategic Finance struggles to refinance on property slump
Strategic Finance, which gained approval for its moratorium from debenture and noteholders in December, has struggled to refinance outstanding debts as deterioration in the property sector makes it difficult for its borrowers to raise capital.
Tuesday, 5 May 2009
As a “forced seller,” the weak property market has meant the finance company hasn’t been able to secure a fair value for some of its assets, and it will reevaluate the value of future cash flows, it said in its quarterly update today.
The company said aggressive cuts to the official cash rate by the central bank indicated an economic recovery would be gradual. Strategic has set a date of January 7 next year to repay at least 9% of principal to stockholders.
“We believe the market conditions will remain challenging for the remainder of the year,” the company said in its update.
Strategic “will continue to focus our efforts in securing the very best outcome for all investors to meet our obligations as outlined under the moratorium.” The company posted a first-half loss of $32.8 million in February as the downturn in the property and finance sectors increased provisioning and bad debts.
Under its moratorium proposal interest on investments was re-set at 8% for all security holders, which will be paid out in quarterly installments to December 2013. Strategic froze repayments to 15,000 investors owed $325 million in August.
Close to 50 finance companies are in receivership, liquidation or moratorium as of last month, with more than $6 billion of deposits at risk. The finance company sector in total is worth about $22 billion.
Commenting is closed
Find a Rate
2 July 2015
15 June 2015
4 May 2015
24 April 2015
21 April 2015
Cash PIE Rates
Weekly Updates including news and commentary
Disclaimer - Every possible effort has been made to keep the information in the tables and on this site as accurate as possible, however, neither the publisher, Tarawera Publishing, nor anyone engaged to compile the rates and this site accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details with providers. The full terms and conditions of this site can be found here.
© Copyright 1997-2015. Tarawera Publishing Ltd. All Rights Reserved.