Strategic moratorium plan: principal + 8% interest by Dec 2013

Strategic Finance has announced plans for a moratorium that will seek to repay principal investments as well as interest to investors by December 2013. The plan, in agreement with Strategic's trustee Perpetual Trust and financier Bank of Scotland International (Australia) Limited, will be put to investors on December 22. It will offer quarterly repayments of principal and interest to security holders. Interest will be reset to 8% at August 7, 2008 for all security holders, Strategic said. "The directors of Strategic Finance believe that, in the context of the current circumstances, the moratorium is the best way forward and that it will result in higher repayments to all security holders than would be available in a receivership," Strategic CEO Kerry Finnigan said. "The aim of Strategic Finance is to repay all principal and pay accrued interest to stockholders, deposit holders and subordinated noteholders over the course of the moratorium period. However, the ultimate outcome of the moratorium and the amount and timing of payments to security holders will depend on the successful realisation of Strategic Finance's assets," Finnigan said. It is anticipated that PricewaterhouseCoopers will be appointed as the monitoring accountant during the moratorium and will monitor Strategic Finance's compliance with the terms of the moratorium. "The moratorium is not subject to the approval of the perpetual preference shareholders. No changes are proposed to the terms of issue the perpetual preference shares under the moratorium. However, if the moratorium proposal is approved then it is intended that a dividend cancellation notice will be issued cancelling all future dividends on the perpetual preference shares until the end of the moratorium and Strategic Finance has been able to fully repay the prior ranking stockholders, deposit holders and subordinated noteholders," Finnigan said. The management of Strategic Finance will be undertaking presentations throughout the country to explain the moratorium proposal to investors. Dates and locations for presentations can be found at Strategic's website.