KEY POINTS:
The failure of three finance companies in mid-2006 has cast a shadow over the financial services sector.
FAILURES TIMELINE
May 2006
9th: National Finance 2000 goes into receivership.
10th: Provincial Finance indicates it will report a loss for the year ended 31 March 2006, arising
mainly from car loans made during 2003-2005.
23rd: Troubled Provincial Finance looks to sell as much as $25 million of its $42 million commercial property loan book to South Canterbury Finance in order to raise cash.
30th: The owners of Provincial Finance offer to throw another $10 million in the pot, taking the total rescue package to $37 million.
June 2006
2nd: Provincial Finance is put into receivership. Shareholders, the trustee and receivers are now trying to rescue the flagging company.
6th: Provincial Finance stated they are confident they will raise the $11 million required to keep the company out of receivership.
7th: The $27.5 million bill to bail Provincial Finance out ($11 million from interested parties and $16.5 million from the Provincial Finance chairman and directors) could increase depending on the valuation of its subsidiary Tasman Pacific Insurance.
12th: A rescue plan for Provincial Finance has been abandoned as being too expensive. South Canterbury Finance is backing away from a possible loan book purchase through fear that the association will impact negatively on them.
July 2006
2nd: Investors in Western Bay Finance are on the edge of their seats as the full extent of the company's financial problems are slowly revealed.
9th: The receivers' report for National Finance 2000 is released, predicting a 30 to 50 per cent recovery of debenture holders' money.
13th: Everyone wants a piece of Provincial's pie, with fraudsters targeting people currently making vehicle loan repayments to the company. The receivers have warned of a scam to trick people into making payments to a bogus bank account.
21st: Western Bay Finance has suspended payments to investors as it seeks to sell assets, in a bid to avoid receivership.
SBS subsidiary, Finance Now, is said to be one of the interested parties.
August 2006
3rd: Western Bay Finance finally "call in" the recievers after they halted new lending back in June. More thatn $48 million is owed to investors.
4th: Receivers' report for Provincial Finance is released, advising debenture holders should receive most, if not all, of their principal back.
18th: Debenture holders in Western Bay Finance are expected to receive about 75 to 80 cents in the dollar of debenture stock. Talks continue between Finance Now and Western Bay Finance about the sale of assets.
September 2006
29th: The receivers of Provincial Finance make a payment of 25cents in the dollar to debenture holders, higher than initially predicted due to unexpected recoveries made.
Finance Now completes its purchase of part of Western Bay Finance's loan book for $27.9 million (face value $30 million).
About 3,000 investors in Western Bay Finance are still waiting to see whether the expected total return of 75 to 80 cents will materialise.
October 2006
2nd: Receivers of Western Bay Finance make a payment of 66 cents in the dollar to debenture holders.
* Source: KPMG Financial Institutions Performance Survey 2006
