Receivers for finance company Capital+Merchant Finance have slashed the amount they estimate is recoverable for investors to 8c in the dollar.
C+M Finance, along with subsidiary Capital+Merchant Investments, was placed in receivership in November, owing around $188 million to 7000 investors. Debenture holders are owed $168m.
First receiversRichard Simpson and Tim Downes of Grant Thornton said today that debenture holders were now likely to receive just 8 per cent of their investment at best, from an original estimate of 14 per cent to 59 per cent long-term.
"Unfortunately, the poor quality lending, the deteriorating property market, and lack of alternative credit to facilitate refinancing options have had an adverse effect on our ability to recover outstanding loans and assets," the receivers said.
Combined with the expected full recovery for Fortress Credit Corp, which appointed the receivers under their priority charge, the overall forecast recovery was 18 per cent.
Gross recoveries of $42.8m had been realised, from 55 loans with a total book value of $182.6m. Of that amount, $13.4m had been repaid to Fortress, with the balance paid to prior ranking security holders or applied to the costs of running the receivership.
The receivers and other agencies such as the Securities Commission also continued to investigate a number of transactions of concern.
Investigations covered some transactions entered into by the company before receivership; and the activities and conduct of the company and third parties before receivership.
"Due to the legal consequences and the nature of these investigations, we are unable to provide details regarding these issues or our findings to date," receivers said.
Further sales and settlements were pending, but realisation of the loan portfolio would be a complex and time-consuming process.
In May, second receivers KordaMenth said C+M's loans were primarily property related and many of them were of questionable quality.
