Tardy interest payments by Aorangi Securities' borrowers continued to slow progress for the statutory managers with a total of $5 million still outstanding.
In their fifth report on the statutory management of Aorangi Securities, Hubbard Management Funds, Allan and Margaret Hubbard and associated charitable trusts, statutory managers Richard Simpson, Trevor Thornton and Graeme McGlinn, of Grant Thornton New Zealand, said the September cash collection was still $2 million less than expected.
There had been little improvement in the collection of arrears of $3 million.
"Requests will go out shortly for payments due on December 31 and we are guardedly hopeful that the level of collection will be greater this quarter.
"With dairy cash flow expected to be stronger over the next six months, we anticipate both better returns and a payment of arrears," the managers said in their report.
The key focus in the last month had been the ongoing analysis of the Aorangi business, which the statutory managers had divided into three categories:Category one included 31 mortgage loans with a value at August 2010 of $59 million.
Category two included 15 direct investments by Aorangi valued at $47 million. Those were made up of 12 farm loans, two commercial property investments and $10 million in Southbury Group, which was unlikely to be recovered because of its receivership.
Category three was a loan to Te Tua Charitable Trust of about $24 million.
The statutory managers said Aorangi's ability to recover full repayment or realisation of investments was significantly reduced because of the level of overall indebtedness. Only one in five borrowers was paying any interest on their loans to Aorangi.
However, October was a good month for Hubbard Management Funds with a value of $56 million.
The nature of the portfolio had led to significant fluctuations in value. Some of the movements in value experienced had been as much as $1 million a day.
Most of the last month had been spent working towards the ultimate distribution of assets. That had centred on a court application to confirm the actions being contemplated to manage the fund in the interests of investors, they said.
"We are seeking court confirmation that will allow us to manage and maintain the portfolio and to make new investments to protect and enhance the investors' position."
The statutory managers hoped to file a second and more far-reaching application with the courts by March 31 next year.
That was an important part of the process which would determine the entitlement of investors to the assets of the fund and how the managers distributed those assets to the investors.
"As part of this process, we will need to keep investors formally informed throughout" they said.
