Investors owed $96 million from Aorangi Securities Ltd - aside from $50 million written-off - may be waiting up to four years for full repayment as statutory managers Grant Thornton deal with some borrowers struggling to pay back loans or meet interest payments.
Aorangi, along with Hubbard Management Funds, is an investment management business operated by Allan Hubbard, who along with his wife, numerous trusts, and three other companies, have been under Government-appointed statutory management since June last year.
The managers said in their sixth report yesterday, various assets of the Hubbards, valued at $50 million-$60 million, are to be transferred to Aorangi and are already included in its portfolio.
Investors are due $96 million, with a estimate of a realisable value of $87 million-$97 million, meaning investors could suffer a loss.
Mr Hubbard would not receive any money from Aorangi and no interest would be paid on realisation, the managers said yesterday.
A 10c-in-the-dollar payment is due investors in June.
"In many instances the loans and investments are non-performing and require intensive management to be in a position to realise," the managers said.
The managers had said in the fifth report Aorangi investments included 31 mortgage loans valued last August at $59 million, $47 million in 12 farm loans, two commercial property investments and the Southbury Group and a Te Tua Charitable Trust loan of $24 million.
The estimated realisable value of Aorangi in January totalled $142.6 million in cash, the Te Tua Charitable, related party and third party loans with a $142 million book value, but with subsequent bad debt provisioning of $50 million dragging the total down to an estimated "realisable value" of $91.9 million.
Yesterday, the managers outlined slow repayments of interest due, unsuccessful requests for early repayment of loans and their having issued formal demands for repayment and Property Law Act notices; noting total interest payment arrears was now $3.9 million, of which $1.7 million is owed by parties related to Mr Hubbard.
"The Aorangi loan book comprises a wide variety of non-performing assets including farms, commercial property, forestry, infrastructure, personal and business loans and in many cases interest has never been paid," the managers said.
A separate Grant Thornton report released earlier in the week on Hubbard Management Funds estimated investor losses of close to $31 million.
