St Laurence aims to repay 70% of debentures over 5 years

Kevin Podmore's St Laurence Ltd has proposed a recapitalisation and delayed repayment plan that the property financier believes could see debenture investors repaid 70% of their NZ$240 million of investments within 5 years. The proposal would need the support of 75% of almost 9,000 investors in a vote on December 5, St Laurence said. This is the first of the repayment proposals to come from the 'big five' of St Laurence, Dominion, Dorchester Pacific, Strategic and Hanover, who froze their investments in moratoriums in June and July pending such proposals. Dominion has since gone into receivership. Proposals are imminent from Dominion, Dorchester and Hanover, while Strategic is reworking its plan before Christmas after a management buyout proposal was shelved. St Laurence Limited said its proposal had been approved by Perpetual Trust and it had registered a prospectus, which would be mailed to investors this week. "The purpose of the Plan is to enable St Laurence to try to maximise the return to investors by allowing the company to continue trading on a going concern basis," Podmore said in a statement. "It provides time for St Laurence to have its loans repaid in an orderly fashion and allows it to undertake activities to preserve and add value to the group's funds management businesses," he said. "The directors believe it is a better alternative for investors than receivership."   Investors would be asked to change their investment terms and agree to an 8% interest rate, St Laurence said, adding that interest due up to the December 5 vote would be paid after the vote, but that regular principal repayments would start from April 1 next year. Podmore said the current state of finance markets made it extremely difficult to predict with certainty when St Laurence would be able to fully repay investors. "Our goal is to repay our investors 100% of their principal plus pay accrued interest. We are not sure how long that will take us but over the next five years we are aiming to have repaid at least 70% of the debentures and 20% of the capital notes as well as 70% of the interest accrued on debentures," Podmore said. "Under receivership the directors believe debenture holders will receive less than all of their investment. There would also be no cash available for any payments to Capital Note holders and unsecured creditors." Podmore's company Auguste Finance Ltd had agreed under the plan to contribute new equity by transferring property worth NZ$10 million to St Laurence. Auguste, Podmore and some related parties would also provide a guarantee of up to NZ$20 million that would be available in "certain circumstances." "We believe this support package demonstrates our commitment to the Plan, and the extent to which we wish to align our interests to those of our investors," Podmore said. "We believe it is important to do our very best to support the investors who have supported SLL over the years." See more detail on all the finance company closures and collapses in our 'Deep Freeze' list.