INVESTORS in Banksia Securities Limited (BSL) are likely to receive further repayments of their money earlier than first forecast.
The receivers for BSL, McGrathNicol, yesterday announced they would speed up the timing of payments to investors in the BSL and the associated Cherry Fund Limited (CFL) following a good collection of funds so far and strong interest in the sale of BSL’s performing loan portfolio.
McGrathNicol receiver Tony McGrath said it expected to make a payment of at least five cents in the dollar by early May and another payment of between 20-35 cents in the dollar before June 30.
Mr McGrath said the five cents-in-the-dollar payment would come from funds already collected.
The receivers made a first payment of 20 cents in the dollar to investors on December 7, funded largely from BSL’s cash reserves.
The third payment of 20-35 cents in the dollar is expected to come from the proceeds of a planned sale of a 565-loan portion of BSL’s loan portfolio that had “limited impairment and represents the most readily realisable portion of the companies’ loan book,” the receivers said.
Final offers for BSL’s and CSL’s loan portfolio were expected to be received late next month and the sale scheduled for completion during April.
Mr McGrath said he was confident of a positive sale outcome for the loan portfolio, based on the strength and calibre of the interested parties. He did not comment on a likely sale price for the loan portfolio, which has a face value of $270 million.
While investors might receive payments earlier than first thought, the receivers retained their forecast that the total payment to BSL investors would be 50-65 cents in the dollar.
However, they expected the lower end of the payment forecast to be exceeded.
Mr McGrath said the receivers were reviewing a broad range of matters to determine whether there were any claims against third parties that could increase returns to debenture holders.
“As part of this process we are undertaking a detailed review of BSL’s records and disclosures, related party transactions and advances and the manner in which key parties such as directors, officers, auditors and other advisers have discharged their duties,” he said.
“We are also working closely with the Australian Securities and Investments Commission to assist them with their inquiries as to the failure of the company.”
Mr McGrath also said a committee of debenture holders would be formed to provide a forum to discuss the progress of key receivership matters including the investigations into Banksia’s activities, asset realisations and distributions and to represent the views of debenture holders generally. On other aspects of their receivership of BSL and CFL, the receivers said the two companies had about 87 “impaired” loans which had a face value of $167 million.
They said an “individually tailored realisation program” was being developed for each impaired loan to maximise the return to investors.