Investors 'will fare better' if firm is sold

By Kelly Gregor

Strategic Finance investors will be better off if the company is bought out, rather than liquidated, stockbroker and Strategic investor Chris Lee says.

Strategic was placed into receivership by its trustee Perpetual Trust on Friday after it rejected two alternative offers.

PricewaterhouseCoopers (PWC) partners John Fisk and Colin McCloy were named as receivers of Strategic and its related companies. They will help wind down Strategic's $220-million loan book and attempt to pay back some of the $416 million owed to its 13,000 investors.

The Bank of Scotland is the company's largest creditor, believed to be owed about $75 million.

Lee said Perpetual's decision to place the company into receivership did not have investors' best interests at heart. "Perpetual is focusing on its own liabilities, rather than investors. I hope we have heard the last of Perpetual."

Lee, who has personal investments in the company, said a buyout was the best option for investors but only if it added long-term value.

"A lot of investors are ashamed to speak about Strategic and its failings.

I don't think they should. The company had a better credit rating than TSB Bank ... no one could have predicted the collapse."

Lee said South Canterbury Finance was not in a position to take on more debt but a company like it would be an option.

South Canterbury Finance chief executive Sandy Maier said he had not made any announcement or indication such a deal was an option.

"There isn't any deal pending. Debt equity deals can be attractive, the structure would be interesting but it would depend on the terms whether this would be a viable and a feasible option," Maier said.

He said South Canterbury Finance would release details on the state of the company by the end of the month.

Strategic Finance chief executive Kerry Finnigan said at the moment "anything was possible" but nothing had changed since Friday when the company was placed in PWC's care.

PWC said the receivership would bring certainty to unsecured creditors who had been excluded from Strategic's 2008 moratorium agreement.

- NZ Herald

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