Receivers axe Strategic's NZX listing

Receivers of the failed Strategic Finance yesterday axed its stock exchange listing and said there was no money for preference shareholders.

John Fisk, PricewaterhouseCoopers receiver, said that move would save about $75,000 for higher-ranked claimants of the property financier.

"There was no point in keeping it listed. It's really just our ability to get the bond back. There's an NZX bond of $75,000 that Strategic has with NZX and we get that back by cancelling its listing," he said.

Strategic, listed with the ticker code SFL, has $50 million outstanding debt. Its listing details said it was paying shareholders a coupon return of 10.5 per cent annually, distributed on a quarterly basis.

Fisk said the $50 million would not be repaid.

"The situation is quite clear. There's no value in those preference shares and $50 million is only the face value of them," he said.

The future for the much larger group of Strategic Finance investors remained unclear.

Fisk cannot say how much those 13,000 investors who poured $417 million into the failed business will get back.

They are separate to the preference shareholders on NZX, he said.

Strategic Finance was listed on the NZX's debt market but has not traded since the receivership.

"Having regard to the extent of SFL's creditors, and the receivers' assessment to date of likely recoveries, the receivers anticipate there will be a shortfall in the amount available for creditors and no amount available for SFL's preference shareholders.

"In these circumstances, the receivers are applying to NZX to cancel quotation of SFL's preference shares and to delist SFL," PWC announced.

Chris Lee, a Kapiti Coast sharebroker whose clients were Strategic investors, wrote in his Taking Stock column on Thursday that no one was angry with the borrowers "who convinced banks and Strategic to fund developments in places like Fiji, Auckland City, Albany and Arrowtown and have not repaid their loans".

Anger was building about Strategic, he wrote, "with probably some unexpressed anger at me as an adviser who still believed their NZX announcements as late as July 2008".

"There are some myths that simply must be stopped. As far as I can see there was no loan of any Strategic money to the Hilton Hotel in Taupo. The loans were from a company that had no right to or access to, any SFL investor money," Lee wrote.

"Kerry Finnigan [Strategic ex-chief executive] does not owe Strategic any money. He did not borrow from SFL $800,000 at zero interest, as reported on internet sites. Related party lending was disclosed.

"No intermediary, including Forsyth Barr, was allowed to withdraw large sums of money prematurely. Indeed Forbar had supplied virtually all of the money for preference shares, a category of investment unlikely to receive a return."

Brian Fitzgerald, a Strategic consultant, was an Equiticorp/Alan Hawkins survivor and organised funding of dozens of major projects, Lee said. Fitzgerald had an impressive track record and only a few weeks ago, told Lee he was confident Strategic's projects would be restored.

"He told me so," Lee wrote.

"Investors are absolutely entitled to be grumpy about the horrid outcome and no doubt there will be some clever sods out there who will tell you that they foresaw it, or expected others to see it. They are cleverer than the banks, HBOS, the auditors, the trustees, the directors, the management, the credit rater, and cleverer than me. It is a pity they chose not to share their wisdom before it all happened.

"New Zealand has a dreadful record, perhaps caused by our defamation laws, and emphasis on rights rather than responsibilities, for staying silent, when speaking up is the responsible thing to do," he wrote.

"How many people knew about First Step, Bridgecorp, Nathans, Capital & Merchant, MFS, Lombard and Five Star but said nothing?"

STRATEGIC FINANCE
* Listed in 2007
* Debt instrument
* Listing cancelled
* No shareholder money

Are you a Strategic Finance investor wanting to tell your story? Email anne.gibson@nzherald.co.nz