Debenture holders in property finance company St Laurence have voted overwhelmingly in favour of its repayment plan, although it is expected to take up to 13 years for the $250 million to be paid back.
About 9000 investors voted on the plan at a meeting in Wellington yesterday,
with 95.86 per cent of secured stockholders passing it and 99.64 per cent of unsecured capital noteholders giving it their approval.
Managing director Kevin Podmore said he was pleased by the result and the support the company had received. "Our core focus now is on returning St Laurence to profitability."
He said the plan would allow loans to be repaid in an orderly way while preserving and maximising the value of the funds management business.
"Investors will accrue interest on their investment and receive quarterly principal payments providing a regular income for investors until principal is repaid," said Podmore.
Investors will see their first payments in hand from next week, with outstanding interest from July 1 to December 5 to be repaid on secured debenture stock and interest from May 1 to December 5 being paid to capital noteholders.
The recapitalisation plan will see 70 per cent of debenture holders' principal converted into "Class A" stock and 30 per cent into "Class B".
St Laurence will then begin to repay Class A stock at a rate of 2c a quarter starting from April next year with the final payment of principal promised in November 2013.
Repayments of Class B stock will also be made at 2c a quarter but it will not have to be repaid until 2021.
Unsecured noteholders are to be repaid at 1c in the quarter and are not likely to be repaid fully until 2034.
St Laurence plans to continue paying interest at 8 per cent but will only do so once the class A and B principal has been repaid.
The deal also allows the company to begin lending again.
