An Australian financial group has been labelled “insolvent or likely to become insolvent”, with $660m of investor funds being put at risk.
Banksia Securities Limited (BSL), is now under the receivership of McGrathNicol, which was brought in by BSL secured creditor The Trust Company (the Trustee) following fears surrounding the group’s solvency situation.
The receiver appointment was made on the back of a request from BSL’s board.
According to a McGrathNicol statement, BSL owes approximately $660m to investors, and advanced these funds to borrowers primarily to finance real property purchases. BSL holds first ranking real property mortgages to secure its advances.
“Control of the business and the assets of BSL rests with the receivers and managers who will be working in close consultation with the Trustee to ensure the interests of debenture holders are being protected,” said the statement, which added that interest payments and redemptions have been frozen as at 25 October 2012.
“We are in the process of conducting an urgent review of BSL’s financial position, loan book and underlying security properties. Our primary concern is to ensure the interests of debenture holders are being protected. In this regard, we will be working closely with the Trustee to ensure debenture holders receive regular communication and BSL’s assets are managed in a manner to maximise returns,” said receiver Tony McGrath.
“The Trustee has acted on the Board of BSL’s request to appoint receivers and managers. We will focus our attention on ensuring debenture holders are treated fairly and equally. We will communicate with debenture holders openly and will act in their best interests throughout the receivership,” added The Trust Company group executive GM corporate client services David Grbin.
A circular sent to BSL investors stated that interest payments and redemptions have been frozen as at 25 October 2012.
“This means that at this stage, you will no longer receive regular payments, nor will your investment, including any interest reinvested or accrued up to 25 October 2012, be returned to you on its maturity. We will notify debenture holders if this situation changes,” said the circular.
“We are presently calculating the value of your investment to the date of our appointment and will provide those details as soon as possible.
“At this early stage, timing and the amount of any dividend is uncertain and is dependent on the realisation strategy adopted by the receivers and managers.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out