Investors in failed boutique company St Kilda Finance have been paid out $1.4 million, but receivers have warned further disbursements will be at the lower end of the forecast scale of 45c to 80c in the dollar.
All Purpose Finance, trading as St Kilda Finance, was placed in the hands of receivers in mid-November by its directors, owing almost $6.93 million to 358, mainly southern, secured investors representing 419 term deposits.
St Kilda's main asset was its loan book, with lending of $9.6 million largely secured by second mortgages to New Zealand borrowers.
However, since November, a continued decline in the property market had, "inevitably", had an adverse effect on overall realisations, the receivers said.
Receiver Stephen Tubbs, of BDO Spicers' Christchurch office, in the six-monthly report on St Kilda, said a payout of 21c in the dollar was made in January, totalling $1.47 million, funded from receivables "collected in the ordinary course of business".
He said the gross value of St Kilda's loan book stood at $7.64 million, down $1.9 million since the November receivership, which meant the balance owing to investors stood at $5.54 million.
"We initially indicated that recoveries for investors would be in the order of 45c to 80c in the dollar. We [now] anticipate that the recoveries will be towards the lower end of that band, however, we reserve the right to revise this estimate in the event of further adverse conditions being experienced and the level of defaulters increasing," Mr Tubbs said.
It had been estimated earlier by the receivers that at 80c in the dollar investors would share a total $5.52 million, however at 45c in the dollar, the total dividend to investors would be $3.1 million.
St Kilda came unstuck after more than two dozen finance companies either failed or went into moratorium in the past two and a-half years, as risk-averse investors shied away and reinvestment rates plummeted from 65% to 15%.
