Deterioration in the property and finance sectors and debt recovery delays have hit Strategic Finance, which is facing the "tough" task of repaying $325 million in principal plus interest to 15,000 retail debenture investors.
Strategic, which secured investor approval for a five-year deferred payment scheme in December, was
forced to increase provisioning and to write off bad debts to a total of $53 million for the period - worse than it was forecasting.
The bleaker outlook meant the company also had to write off a $17.2 million deferred tax asset and goodwill of $1.1 million.
It reported a net loss of $32.76 million for the December year against a $14.64 million profit a year earlier.
"Whilst the global and national markets continue to face a severe economic recession and the trading results have been heavily impacted as a result, Strategic Finance's management continues to be fully focused on maximising recoveries from the orderly realisation of its loan book," chief executive Kerry Finnigan said.
Finnigan was not available to answer Herald questions about whether the result, which was worse than expected, would affect returns to his company's investors.
Under its repayment plan, Strategic says it will make quarterly payments to investors starting from September. But it must pay $25 million to lender Bank of Scotland International before repaying debenture holders anything.
BoS is also owed a further $78 million that ranks at the same level as debenture holders.
The company intends to repay both interest and principal, but at the time of the repayment plan approval Finnigan admitted it would be tough.
"We are in uncertain times and there will be things that could occur that are outside of our control. The concern is that will be negative. But our forecast today is that it is achievable."
Strategic froze payments to investors in August last year. It came up with the repayment plan after a management-led consortium's bid to buy the business from troubled investment company Allco HIT fell through in October.
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