INVESTORS in the Southern Financial Group will be able to access their funds from 9am on Monday.
Southern yesterday announced it had signed an agreement to sell most of the company to the Bendigo and Adelaide Bank, clearing the way for the freeze on funds to be lifted.
Investors’ access to their funds had been frozen since November 26 by Federal Court orders.
The court orders followed concerns by Southern’s trustee, Sydney-based The Trust Company, about the possible continuation of a run by investors wanting to withdraw their investments from Southern following the collapse in October of fellow non-bank debenture issuer, Banksia Securities. The court orders had been extended three times and a Federal Court hearing in Sydney yesterday extended the freeze for a fourth time, until 9am on Monday.
In identical statements released yesterday, the two companies said that under the sale agreement the Bendigo and Adelaide Bank would acquire Southern Finance’s loan book and other assets, with the purchase price to repay Southern Finance note holders.
Bendigo and Adelaide Bank managing director Mike Hirst said he was pleased to sign the deal, which was in the best interests of customers and the community.
“The deal realises the value of Southern Finance’s assets, freeing up the funds needed to repay its investors,’’ Mr Hirst said. “Following the deal, the bank is well positioned to support the financial goals of borrowers and financial planning customers.’’
“This is great news for Southern Finance customers, who now have certainty of their finances before Christmas.’’
Mr Hirst said the region in which Southern Finance operated was Bendigo and Adelaide Bank’s heartland.
Southern’s headquarters are in Warrnambool and it also has offices in Hamilton, Casterton, Mount Gambier, Ballarat and Geelong.
Mr Hirst said the sale would allow customers who had used Southern Finance to “have a substantial offering” with the Bendigo and Adelaide Bank.
Southern Finance chief executive officer Ashley King said while the agreement for the sale was complete, the transition was expected to take about six months.
“Now that the deal is complete, the payment of redemptions to noteholders whose investments have matured in the deferred period, including at-call, can now recommence,’’ he said.
“Term investments that have not yet matured will be redeemed at their stated maturity dates or earlier at the discretion of Bendigo and Adelaide Bank. It is expected that all notes will be redeemed on or before June 30, 2013.”