During the past two years, more than 25 finance companies have failed or placed a moratorium, or freeze, on investors' funds, estimated to be worth more than $4.5 billion.
St Kilda was established in Dunedin in 2003, as a specialist in second mortgage lending to individuals or commercial entities.
Chairman John Farry said last night the company "was not at present" considering placing a moratorium on payments and with $5 million in paid-up shareholder capital, debenture payments could be met.
While the $5 million capital had been slightly eroded, St Kilda should not go into deficit, he said.
"We feel we can work our way through it. We have sufficient capital to pay debentures as they come through," he said.
Mr Farry said in the directors' report, released on August 1, St Kilda Finance was winding down its mortgage book and repaying debentures as they fell due.
But last night he said St Kilda Finance itself "would not necessarily be wound up".
At August 1, the company owed $9.7 million to 553 investors, while there were 24 loans worth a combined $10.3 million, Mr Farry said.
Apart from poor reinvestment rates, a deterioration in the property development area meant St Kilda had written off loans worth $399,833 and made provision for $780,889 of doubtful debts.
