Propertyfinance Securities, the finance company subsidiary of Christchurch's Propertyfinance Group, yesterday came out of receivership and will resume payments to its 4000 debenture investors, who are owed more than $83 million, this month.
In August last year Propertyfinance Securities became the sixth finance company receivership in an 18-month
string of failures. But unlike many of the others Propertyfinance said its troubles were related to the international credit crunch that prevented the sale of its mortgage-backed securities on financial markets.
Yesterday NZAX-listed Propertyfinance Group's managing director, Darryl Queen, said that a restructuring plan for Propertyfinance Securities, which the group had been working on for some time, had been settled and the company's receivers had been retired.
"We're absolutely stoked. It's been a big project."
Last month the restructuring proposal suffered a setback when a pre-arranged $710,000 bridging finance facility was withdrawn.
Since then the group had been looking at alternatives and had secured an equity injection which would allow it to issue new shares and it had also secured a smaller replacement bridging facility.
"That got us over the line."
The new shares will be issued to existing and new investors and the bridging facility has been extended by a local lender.
Propertyfinance debenture holders, who have not received any cash from the group since August, will receive an initial payment on February 20.
Queen was unable to say how much that would be or whether investors would eventually receive interest payments they had missed.
Queen said the finance company operation would not issue any more debentures and was effectively now in a management-led wind-down process.
However, Property Finance Group eventually hopes to recommence its lending and mortgage securitisation program at some point further in the future.
Since August the mortgage securitisation trusts, which administer the $630 million in loans associated with Propertyfinance Group's mortgage backed securities, had been performing well, said Queen.
