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NZF Money's investors likely to receive 25c to 42c in the dollar

NZF Money's debenture holders are likely to be repaid between 25 cents and 42 cents in the dollar of the $16.4 million they were owed when the company went into receivership on July 22 last year.

Tuesday, 20 March 2012

by Jenny Ruth

Receivers Grant Graham and Brendon Gibson of KordaMentha say in their second report on the company they believe "it is extremely unlikely there will be a return to unsecured creditors."

The receivers say they have collected about $3.4 million in loan repayments and from selling a subordinated note and still have 20 loans with a face value of $27 million to collect.

"It is apparent from the receivers' investigation that the NZF loan book was significantly overvalued as at the date of receivership and that the loan book contained a significant level of unrealised bad debts," receivers

They were appointed on July 22 last year after NZF Money's directors anticipated a breach of the debenture trust deed.

NZF Money's last prospectus had shown $19 million of its loans were past due at June 30 last year.

Hillview Trust, a trust associated with Pat O'Connor, a non-executive director of NZF Money's former parent company, NZF Group, claims an interest "in the proceeds of certain loans in priority to the trustee's interest," the receivers say.

"The receivers do not yet agree Hillview Trust's claim is valid."

NZF Group's last annual report said: "Loans provided by the Hillview Trust to NZF Money Limited under a loan participation arrangement are secured against certain first mortgage loans" totalling $3 million at March 31 last year.

The annual report also said $1.4 million of debentures provided by Hillview had been scheduled for repayment on April 29 last year.

The receivers' report shows their remuneration was nearly $0.3 million for the six months ended January 21 while legal costs were almost $0.2 million.

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