Friday 18th April 2008
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Allan Hawkins' listed company Cynotech has bought $30 million worth of uncollected loans from the receivers of collapsed finance company Western Bay. It has paid $1.5 million for the book of receivables, made up of $1 million cash and 3.12 million Cynotech shares at an issue price of 16c each.
Cynotech says: "The quality of the Western Bay receivables as they now stand is not good," but the company is confident that its experienced credit team will be able to collect a significant amount of the receivables still outstanding.
Cynotech purchased the loan book of National Finance 2000 in late 2006 and has so far collected around half of the consideration paid to acquire those receivables. Collections on the National Finance book continue to increase month by month as court actions take effect and missing debtors are traced.
In addition to the Western Bay receivables Cynotech has also arranged to purchase another salvage ledger from a motor vehicle group, with a face value of around $1 million for a nominal payment of $50,000.
It has also completed the purchase of receivables totalling $5.7 million from a part of the Capital + Merchant Finance Group.
These receivables are performing loans and provide an ongoing business stream in motor vehicle dealer financing.
Cynotech says that it has paid around $8 million for receivables with a face value of more than $60 million.
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