Ailing finance company Dominion Finance Group (DFG) has been put into receivership.
The company owes 6055 debenture holders $224 million.
Louise Edwards, chief executive of trustee Perpetual Trust said the decision was reached following an extensive review of the company.
"As part of this decision, we considered a
wind-down proposal presented by the company," she said today.
"However, in the case of Dominion Finance Group, we consider receivership to be the preferable course of action as opposed to other alternatives such as a company managed wind-down under a moratorium."
In particular, debenture holders in DFG would benefit from the statutory powers of receivers to ensure their interests were best protected.
DFG's parent Dominion Finance Holdings said the directors of DFG did not consider that Perpetual Trust's decision was in the best interest of DFG's stockholders.
DFG had provided Perpetual Trust with all essential terms of its moratorium proposal last Thursday, was at an advanced stage of preparing the necessary disclosure documents, and had wished to present the moratorium proposal to stockholders.
The receivers are Rod Pardington and Barry Jordan of Deloitte, who are to send debenture holders a report on their initial findings as soon as possible.
Dominion Finance Holdings said a receiver had not been appointed to its much smaller subsidiary North South Finance.
North South had provided its trustee Covenant Trustee Co with all terms of a proposed moratorium, and was working with Covenant with the aim of finalising disclosure documents and holding a stockholder meeting in late September or early October.
Covenant managing director Graham Miller confirmed Covenant had agreed to allow North South's debenture holders to consider an orderly supervised wind down of North South.
Extensive discussions had been held with North South's directors and management, in conjunction with ASB and BOS International who between them controlled about a third of the debenture stock.
"We have received advice that indicates that an orderly supervised wind down has potential to produce a better outcome for debenture holders than receivership, and that it is appropriate for debenture holders to consider this alternative," Mr Miller said.
Covenant required the process be supervised by experienced insolvency specialists Korda Mentha.
- NZPA
