Receivers of Dunedin boutique company St Kilda Finance have advised investors may see an initial 21c in the dollar payout by early February, following settlement of a $1.5 million loan due today.
All Purpose Finance, which traded as St Kilda Finance, was placed in the hands of receivers BDO Spicers in Christchurch in mid-November by its directors, owing almost $6.93 million to 358, mainly southern, secured investors.
Receiver Stephen Tubbs posted the receiver's first report on the Companies Office website yesterday, saying it was "likely" any further payouts would be paid out over time as cash built up after loans were recovered.
As with an earlier letter to investors, obtained by the Otago Daily Times, Mr Tubbs estimated in the receivers' report yesterday the final payout could range from about 42% to 67% of the capital invested - a total $5.53 million in the best-case scenario or $3.1 million in the worst case.
St Kilda, which largely had second mortgage loans and was headed up by Dunedin businessman John Farry as chairman, suffered the same fate as dozens of other finance companies during the past two years when risk-averse investors shied away and reinvestment rates plummeted from 65% to 15%.
The reinvestment issue forced many finance companies into moratorium or receivership and tying up an estimated $6 billion of investors funds.
Mr Tubbs said yesterday: "The [St Kilda] directors had serious concern as to the state of the funding finance market and the impact the global financial crisis has had on the value of land and buildings."
Commenting on the analysis of the loan book, Mr Tubbs said he had "relied heavily" on information supplied from St Kilda management and staff and as yet had not "independently verified" all the information supplied.
Unsecured creditors are owed $28,725 and Mr Tubbs anticipated there would be no payout to them.
Preferential creditors, such as employees, IRD, PAYE, GST and resident withholding tax are owed a total $52,409 and are ahead of investors for payments
