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One of the owners of the failed Christchurch finance firm Provincial Finance is working on a restructuring plan that will put the company back on its feet.
Receiver PricewaterhouseCoopers, in its latest update to Provincial investors, said it was in discussions "with a party with respect to a
possible restructure of the companies".
Yesterday, former Provincial chief executive and shareholder John Edilson confirmed he was working on a restructuring plan for the company.
Provincial was placed in receivership in June last year owing debenture stock investors $300 million despite the efforts of Edilson and chairman David Lyall, who reportedly injected $27 million in new capital into the company during its final six months by mortgaging properties and selling assets in an attempt to keep it afloat.
Edilson yesterday refused to comment further on his plan and referred the Business Herald to John Waller of PricewaterhouseCoopers.
Waller said: "John's been very good and worked well with us through this whole receivership ... There is definitely an option we are looking at there, but that is not the only option either.
"We've got a number of options ... I don't want to oversell or undersell it, but we are having good discussions with some people."
Waller refused to speculate as to whether Provincial would ever begin trading again.
PricewaterhouseCoopers is also looking at options such as winding down the business or selling it outright to one of "several parties who have expressed interest".
Waller said discussions were at an advanced stage with two parties.
"We hope to be able to report further by the end of September."
Provincial ran into trouble after aggressively moving into the Auckland used-car market, where it made many loans that quickly went bad.
It later emerged that the company had been targeted in a series of alleged frauds.
The receivers have initiated legal proceedings against the BayCorp credit-checking agency and South African used-car dealer Mohammed Farook Osman and his three sons, seeking $17.6 million.
It is alleged the Osmans conspired with a BayCorp employee to get Provincial loans that were extended to people with bad credit records.
Court papers have detailed 1554 loans approved by Provincial on car sales through the Osman family's car yards in Otahuhu.
By November last year, 55 per cent of those loans were in arrears by more than three months.
PricewaterhouseCoopers said that "while the outcome of these proceedings remains uncertain at this time, a successful outcome will not materially change the outcome for investors".
It said debenture investors had so far received 57.5c in the dollar of their principal back and they should recover "most of their principal over time".
Solutions to problem
* Provincial Finance's former chief executive and shareholder John Edilson is behind a plan to put the company back in business.
* Receivers say Edilson's plan is one of three options they are looking at, including winding the company up or selling its assets.
* They also told investors that even if they are successful in a $17.6 million court action against alleged fraudsters and former South Auckland car dealers the Osman family, payouts from the company will not increase.