Government expects hit on Vision Securities receivership

Friday 2nd July 2010

The Treasury has started repaying investors in the failed financier Vision Securities and expects to claw back "significantly less" than it will pay out under the retail deposit guarantee scheme.

Receivers Rod Pardington and David Levin of Deloitte expect distributions from any cash recovered to be "significantly less than the payments made to eligible investors under the Crown retail deposit guarantee scheme," according to their first report. The receivers said the company's assets are principally loans that are mainly secured by second mortgages.

Vision, which specialised in financing retirement villages, was sent to the receivers in April, owing 958 investors some $28.4 million, after it failed to settle a mortgaged property that would have kept the firm afloat.

The government department has sent out forms to approximately 70% of eligible investors and has made its first repayments to debenture holders.

At April 30, the Treasury was estimating $880 million for the net cost of all defaults under the guarantee scheme.

Vision is one of five companies to have called on the guarantee since it was implemented in October 2008.

Businesswire.co.nz

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