KEY POINTS:
The Lombard Group finance company, placed into receivership on Thursday, had a concentrated loan book, with five borrower groups accounting for 80 per cent of the 28 individual loans, receivers said yesterday.
On the loan book was $15 million owed by a range of entities associated with Blue
Chip developments, said John Fisk, one of the two PricewaterhouseCoopers partners appointed as receivers. Blue Chip NZ is joining 20 other related companies in voluntary liquidation.
Last week, Lombard Group, which is not in receivership, said Lombard Finance had hit funding problems on its lending in the property market and sought a freeze on its repayments to 4400 debenture and note holders who had invested $127 million.
But trustee Perpetual Trust yesterday said that placing Lombard Finance in receivership appeared in the best interests of investors.
The Lombard Finance and Investments Ltd receivership also involved three subsidiaries: consumer lender Lombard Asset Finance Ltd, which had a $2.8 million loan book, Lombard Property Holdings Ltd, which owned an Auckland property, and Lombard Asset Finance No 2 Ltd, a dormant company.
It could take three to four weeks before there was an indication of how much was recoverable. Fisk said it was too early to comment on a suggestion that investors could receive just 30c to 40c in the dollar.
"Most of the loans are not just straightforward loans, there's a complexity about them that we will need to get a better understanding of," Fisk said.
Loans were primarily in Auckland and Wellington, with a development on the Mahia Peninsula.
It was "a fair statement" that concentrating 80 per cent of the book in five loans was not the best business practice, he said.
While the Lombard Group preferred a moratorium, Fisk said that receivership provided more certainty, put control into the hands of an independent professional, and was a statutory process with a very clear set of priorities about who was paid.
Lombard Group chief executive Michael Reeves said yesterday that some loans on property developments "will require ongoing engagement with the developer and others to maximise the recovery which we believed would not be assisted by those persons dealing with a receiver".
Lombard Finance was the 17th finance company to hit trouble.
- NZPA