KEY POINTS:
Rod Petricevic's attempt to stave off the liquidation of Bridgecorp's Australian group today rests on the hope of extracting yet more cash from his failed New Zealand business, already owed more than $70 million by the Australian operation.
Creditors of Bridgecorp's Australian companies are to vote on a
Deed of Company Arrangement (DOCA) in a meeting today in Sydney.
If approved, the proposal would see Australian parent entity Bridgecorp Holdings transfer its entitlement to a key Fijian resort development to New Zealand company Bridgecorp, the finance company that went bust in July owing 14,500 debenture investors $430 million.
In return Bridgecorp would pay Australian creditors 5c to 10c in the dollar from profits realised on the project and its claims against Bridgecorp Holdings would be subordinated behind other creditors.
But Bridgecorp's Australian receivers, Philip Carter and Stephen Longley of PricewaterhouseCoopers, did not recommend the proposal, saying it relied on various obligations being fulfilled by Bridgecorp's New Zealand arm.
Bridgecorp's New Zealand receivers Colin McCloy and John Waller, also of PricewaterhouseCoopers, had indicated "they are not prepared to make the transfers/payments required under the DOCA".
Yesterday McCloy said he and Waller did not believe the proposal would result in any benefit to Bridgecorp's New Zealand investors.
"As a consequence we do not consider the DOCA can be achieved," said Carter and Longley in a report sent to creditors this month.
McCloy and Waller have told New Zealand debenture investors they may recover as little as 25c in the dollar with the shortfall the result partly of the more than $70 million in advances from the New Zealand operation to Bridgecorp's Australian businesses, money which may never be recovered.
Carter and Longley also noted the proposal did not involve any injection of funds by Bridgecorp's directors or any other parties.
It also relied on returns from further progress of the Fijian development, something they said was not likely to be realised for several years.
Carter and Longley said their opinion was that the liquidation of the Australian Bridgecorp group was the best way forward for creditors.
In Australia, about 855 individual secured investors are owed nearly A$20 million by the company and 177 unsecured lenders are A$5 million out of pocket.
Meanwhile, Carter and Longley detailed action they had taken to secure Bridgecorp Holdings' interest in a downtown Auckland property joint venture.
Bridgecorp Holdings' subsidiary Bristol Securities owns a 50 per cent interest in the Cook St property with the other half owned by Jamie Peters' Starline Group.
Starline had sought to acquire Bristol's share in the property under pre-emptive rights in the joint venture's shareholding agreement.
According to the receivers, Starline had said they had obtained a valuation in October indicating there was no equity in the property.
That was at odds with an April valuation, used to secure funding for the venture from Westpac and St Laurence, which found that Bristol's share of the equity in the property was $15 million.
Given the discrepancy between the two valuations and the disputed acquisition process, Longley and Carter had footed legal bills for Bristol which secured an injunction against Starline's acquisition.
Since then an abitrator had determined that Starline had not validly exercised its acquisition right.
DECISION DAY
* Bridgecorp's Australian investors vote today on whether or not to liquidate the group.
* The company's directors have tabled a plan which would stave off liquidation but which requires a cash injection from what's left of the NZ businesses.
* Bridgecorp's NZ receivers say the deal doesn't benefit investors here and they won't play ball.
