Financing group Banksia Securities has collapsed, putting $660 million in savings at risk.
Receivers McGrath Nicol took control of Banksia, which is based in the Victorian country town of Kyabram.
Banksia’s trustee appointed Tony McGrath, Joseph Hayes, Matthew Caddy and Robert Kirman as receivers and managers yesterday at the request of Banksia’s board.
The trustee is a secured creditor. However, Banksia owes around $660 million to investors and advanced these funds to borrowers primarily to finance real property purchases.
As a non-bank lender, Banksia offers investors high interest on debentures and holds first ranking real property mortgages to secure its advances.
McGrath Nicol froze all interest payments and redemptions as of last night.
Tony McGrath said the receivers were in the process of conducting an urgent review of Banksia’s financial position, loan book and underlying security properties.
“Our primary concern is to ensure the interests of debenture holders are being protected,” he said in a statement.
“In this regard, we will be working closely with the trustee to ensure debenture holders receive regular communication and Banksia’s assets are managed in a manner to maximise returns”.
David Grbin, group executive general manager of corporate client services at The Trust Company Limited, which is acting on behalf of the trustee, said the trustee will focus 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,” Grbin said.