Elderslie up for sale, but investors face big losses
Tuesday, 8 July 2008
Amanda Gome
The collapsed Elderslie Finance Corporation, formerly chaired by John Hewson, will be advertised for sale this week as receivers dash the hopes of investors hoping to redeem debentures.
Receiver Greg Hall from PricewaterhouseCoopers told investors yesterday that all requests to have debentures redeemed will remain frozen indefinitely.
The receivers also say they cannot provide an estimate of the amount debenture holders might receive, but it is unlikely they will be paid in full. Unsecured noteholders will therefore not receive anything.
Elderslie was placed in receivership last Wednesday with debts of $400 million.
It is expected that the investigative accountants will be asking questions about the speculative nature of some of the investments. SmartCompany reported on Thursday that it looked like mums and dads were financing parts of the loan book that the banks did not want (NAB, Adelaide Bank and Societe Generale all have an exposure to Elderslie).
The Elderslie loan book included a $67 million loan to director Peter George. And it has also been revealed that an arm of Elderslie Finance invested in a company owned by John Hewson, when he was chairman of Elderslie.
But an Elderslie source says the trustee and ASIC had looked at the loan and were satisfied. He also said that the loan to the company associated with Hewson had been fully disclosed and was all above board. “John did the right thing and didn’t vote.”
Meanwhile the source says that former realestate.com.au chief executive, Nigel Purves, is still negotiating to buy the group.
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