Strategic Finance rescue deal terminated (Update 2)

A plan for Strategic Finance's management to buy the company from Australia's Allco HIT with the support of Bank of Scotland International has been terminated, leaving Strategic's future in the hands of its banker and trustee. (Updated to include comments from Strategic Finance Chief Executive Kerry Finnigan and comments from Allco HIT). The management buyout included CEO Finnigan and executive director (and former All Black captain) Jock Hobbs. "The Sale and Purchase Agreement (SPA) was subject to satisfaction of various conditions and the Board (of Strategic Finance) understands that certain of those conditions had become unable to be satisfied, principally due to the recent events in credit markets adversely affecting the outlook for the New Zealand property finance sector," Strategic Finance said. Chief Executive Kerry Finnigan said the company was extremely disappointed at the news. "The global credit crunch has made it incredibly hard to stitch together deals, and has also adversely affected the value of the New Zealand property finance sector," Finnigan said. "The capital restructure was the best option the business had, but there are alternative ways of us doing best for investors and the business," he said. "The Board will continue to work with Perpetual Trust Limited (the trustee under Strategic Finance's debenture trust deed), BOS International (Australia) Limited and Allco HIT Limited as to the best course of action for Strategic Finance and its investors moving forward. The sale transaction and the capital restructure proposal as previously disclosed to the market will not proceed as originally contemplated." Allco HIT said: "the management of each of Allco HIT, SFL and BOSI intend to present jointly to Perpetual Trust Limited of New Zealand, the trustee under SFL's Debenture Trust Deed, a new capital restructure proposal for SFL which will endeavour to set out the best course of action for SFL and its debenture investors, and all stakeholders moving forward." "The SPA's completion was subject to the satisfaction of a number of conditions precedent for the benefit of the various parties to the SPA. Due to the further deterioration of credit markets worldwide and the resultant negative impact for the New Zealand property and finance sector, certain of the SPA's conditions precedent will be unable to be satisfied as originally contemplated by the parties," Allco HIT said.