Archive | Provincial

Ledger sale takes Provincial return to 90.5c

Published 25 August 2008

Provincial Finance Ltd’s receivers said on Friday they’d sold the remaining financial receivable ledgers of Provincial & subsidiary Consumer Credit Ltd and that an 8c payout would take distributions to debentureholders to 90.5c/$.

 

The receivers, PricewaterhouseCoopers partners John Waller & Maurice Noone, said Provincial had sold their remaining finance receivable ledgers to an entity managed by the Bluestone Group financial services business. Provincial was placed in receivership in May 2006, owing 11,000 debentureholders $296.1 million.

 

Mr Noone said: “We are pleased to announce that we have concluded this sale with Bluestone.  Doing so allows us to make a further distribution to debentureholders of 8c/$, scheduled for Friday 12 September. This brings total distributions to $268 million, or 90.5c/$.”

 

The sale advances recoveries by about 2 years.

 

“Completing the sale de-risks the collection process and simplifies the receivership down to one primary issue, the litigation against Veda Advantage Ltd. It also has the additional benefit of providing for ongoing employment to nearly all the remaining Provincial employees with Bluestone.”

 

Bluestone was established in 2000 as a specialist financial services lender & asset manager and has provided over $5 billion of loans to over 20,000 Australians & New Zealanders. It manages a portfolio of about $3 billion in Australia & New Zealand. Bluestone is owned by a number of private & institutional shareholders, including Bank of Scotland International, UK fund manager Cambridge Place, Crescent Capital & management.

 

Mr Waller said one more distribution to debentureholders was likely, but the timing & amount would depend on the outcome of ongoing litigation. “Legal action against Veda Advantage is continuing and we will be holding a portion of the sale proceeds back to fund the litigation.”

 

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Attribution: Release from receivers, story written by Bob Dey for this website.

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25% Provincial payout next Friday, but prospects for preference shareholders bleak

Published 22 September 2006


Provincial Finance Ltd receivers John Waller & Maurice Noone, partners at PricewaterhouseCoopers, said on Thursday a first interim principal repayment would be made to debenture stockholders on Friday 29 September.



“This initial payment will see investors receive a better-than-expected payout of 25c/dollar. This represents a higher payout than previously predicted, as a result of better-than-expected recoveries and some unexpected successes.” In addition, the receivers said they’d been conservative with their previous estimates to avoid unnecessarily raising investors’ hopes.


11,000 Provincial investors hold $300 million of debenture stock. The receivers will make total repayments of $74 million next Friday.


Mr Noone said: “We are pleased with the excellent support we have received from the management & staff of Provincial, and we have enjoyed improved performance in the areas of consumer & commercial loan collections. In addition, asset sales & tax recoveries have boosted the amount available for distribution.


“We are planning to make future repayments quarterly and, if the receivership continues its successful progress, then we expect to make another repayment in December. However, such future payments are likely to be between 5-10c/dollar.


“We are still working with interested parties around restructuring plans, and potentially the sale of certain parts of the books. In the longer term we remain optimistic that debentureholders will get most – if not all – of their principal back.


“However, the forecast for preference shareholders remains bleak. In the absence of a successful restructure it is unlikely that preference shareholders will receive any return on their investment.”


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Attribution: Release from receivers, story written by Bob Dey for this website.

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Provincial shows $54.4 million pretax loss, too early to call recovery outcome

Published 11 June 2006


Provincial Finance Ltd’s receivers said management accounts for the March 2006 year showed a $54.4 million pretax loss, and they expected net assets to fall with a revaluation of Provincial’s 77% stake in Tasman Pacific Insurance Ltd.



The receivers, PricewaterhouseCoopers partners John Waller & Maurice Noone, released management-written accounts and updated debentureholders on the process of determining the beleaguered financier’s actual financial position while they explored potential restructuring options. 


Mr Waller said there were indications that changes in the company’s provision for doubtful debts might also be needed:  “We’re undertaking further work in this area, but any increase in the existing provision of $60 million contained in the unaudited draft management accounts will further erode Provincial’s net assets.”


He said it was important to note the realisation of the deferred tax asset of $17.5 million wasn’t guaranteed: “This amount is dependent on Provincial generating future profits.”


The accounts showed $33.3 million of bad debts, a $52.5 million increase in provision for doubtful debts, against revenue of $78.7 million. Assuming a tax gain of $18 million, the net loss after tax would be $36.3 million.


Mr Waller said the ‘other investments’ which formed part of Provincial’s assets were primarily the Pacific Insurance stake.  “We are currently reviewing this investment and obtaining an independent valuation of this company. However it seems likely that there will be a reduction in its book value, which will result in a further reduction in Provincial’s net assets.”


The management accounts showed assets of $351.8 million, liabilities of $330.6 million for net assets of $21.2 million. The assets were made up mostly of $323.5 million of loan advances, less $60.3 million of bad & doubtful debts, plus $31.6 million of bank deposits, $26.4 million of other investments and the $17.5 million deferred tax. Debenture stock made up just under $324 million of liabilities.


Recovery plans


Mr Waller said the receivers were discussing a proposed restructuring plan with Provincial’s shareholders, a number of industry participants & others, but any plan would take some time to develop. He said it was too early to advise on the potential outcome for debentureholders: “The final result is dependent on a number of factors – most importantly the quality of the loan book & its ultimate recovery.


“There has been some speculation on the likely returns to debentureholders. At this stage it is anticipated debentureholders will recover most, if not all, of their investment over time. As the likely level of recovery from the loan book becomes clearer, so too will the likely returns to debentureholders.


“While further investigation of the loan book is being undertaken there will be no repayment of principal or payment of interest to debentureholders.” However, Mr Waller said an interim distribution was planned for the end of September, though he couldn’t say how much it would be.


Website: PWC Provincial page


 


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Attribution: Release from receivers, accounts, story written by Bob Dey for this website.

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Trustee calls receivers in to Provincial Finance

Published 4 June 2006


Perpetual Trust Ltd has placed Provincial Finance Ltd & 2 subsidiaries in receivership.



Perpetual is trustee for the debenture stock issued by Provincial. It’s appointed PricewaterhouseCoopers partners John Waller & Maurice Noone as receivers of Provincial, Consumer Credit Ltd & South Auckland Cars Ltd.


Perpetual chief executive Peter Baynes said: “Early in April it became apparent that Provincial had breached certain covenants and ratios in its trust deed. The trustee was also concerned at the adequacy of Provincial’s provision for doubtful debts.”On 13 April we wrote to Provincial requiring those breaches to be remedied. We also formally requested the company’s auditors, Ernst & Young, confirm the appropriate provision for bad & doubtful debts at 31 March 2006. A few days later, we formally advised the Registrar of Companies that we believed Provincial was in serious financial difficulties.”Over the period since then, Provincial’s shareholders have made strenuous efforts to address the problems but we have formed the view that the best course to protect the interests of the debenture stockholders, who have invested some $300 million with Provincial and whose interests we represent, is to place Provincial into receivership.”Provincial’s shareholders, together with the trustee & receivers, are in discussions with external parties about a recapitalisation of Provincial.”The receivers have secured the assets of Provincial and are in the process of determining the financial position while the potential recapitalisation plan is explored. Given the size of Provincial and the number of loans, this could take some time. The receivers will prepare & send a report to investors on their initial findings of Provincial’s financial position as soon as possible.”


Related details: Company details on U column week to 4 June 2006, part 6


 


Websites: David Lyall Holdings


Provincial Finance


Tasman Pacific Insurance


PWC Provincial page


 


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Attribution: PWC release, websites & public documents, story written by Bob Dey for this website.

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