Tuesday 6 June 2006
PricewaterhouseCoopers partner Colin McCloy, the receiver of National Finance 2000 Ltd, has estimated that secured investors can expect to recover between 30% and 50% of their original investments in the finance company. Subordinated investors, who rank below the secured investors, have been told they are unlikely to recover any of their invested funds.
Colin McCloy was appointed receiver to National Finance 2000 Ltd (NFL) on 9 May 2006 by the finance company’s trustee, Covenant Trustee Company Ltd (CTC). Initial information supplied by the company indicated NFL held deposits of $25.5 million on behalf of 2026 investors, and that NFL had made loans totalling $27.3 million to 3765 individuals or companies.
Colin McCloy said the receivers had analysed NFL’s loan book and identified “a significant proportion” of loans that were in arrears or unlikely to be recovered.
“Regretfully, we’ve had to inform investors that preliminary estimates show NFL’s assets are insufficient to meet its secured liabilities,” he said. “The upshot is that secured debenture stock holders are only likely to recover between 30% and 50% of their investment, but subordinated investors won’t be in a position to make any recovery.”
Colin McCloy said it was difficult to gauge when the recovered funds would be returned to secured investors, but he expected it to take some time. “It will depend on factors such as the way in which the loan book’s value is realised, along with the company’s other assets,” he said. “It’s highly likely that the money will be paid out over time as loans are recovered, rather than as a lump sum.”
Given the low level of likely recovery for investors, the receivers and CTC have referred the receivership to relevant government authorities for their investigation.
Colin McCloy said: ”We recognise that today’s update may come as something of a shock for many of the investors involved and we regret that we’re unable to provide them with any better news at this stage.”
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NOTES FOR EDITORS
1. Contact
Colin McCloy, Partner, PricewaterhouseCoopers
Mobile 021 623 409
2. About PricewaterhouseCoopers:
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using Connected Thinking to develop fresh perspectives and practical advice. (“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.)
