RECEIVERS for the failed Banksia Securities Limited (BSL) finance company have warned there might be more legal action taken over the company’s collapse.
In a circular to investors released yesterday, receivers McGrathNicol said they had completed their examination of BSL directors and managers but were careful about releasing information gained because “there may be litigation arising from the failure of BSL”.
The directors, auditors and trustee for BSL and the associated Cherry Fund already face a class action by investors in the two companies.
At the time of its collapse in October last year, BSL owed about $660 million to about 16,000 investors throughout Victoria.
McGrathNicol has so far paid investors 70 cents in the dollar on their investment and has said it hopes to pay another 10 to 15 cents in the dollar.
Further payments will depend on the success of the sale of Banksia Mortgage Fund’s (BMF) loan portfolio.
Both BMF and BSL were part of the Banksia Financial Group and BSL had $54 million in loans to BMF.
The receivers said the sale process for the BMF loan portfolio was “proceeding to expectations”.
“Second-round due diligence with shortlisted bidders is under way, and final offers are expected to be received in late October,” the McGrathNicol circular read.
“Subject to those processes, a further repayment (of at least a further five cents in the dollar and possibly more) is expected in early 2014.
“We will update debenture holders on the likely quantum and timing of the next repayment, as well as any revision to the overall repayment guidance, in late November.”
McGrathNicol said it would provide a further update towards the end of November when it had more information about the outcomes of the sale process for BMF.