Friday 8th August 2008
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Strategic yesterday suspended redemptions of debentures and notes citing dwindling liquidity. At the same time, managers led by chief executive Kerry Finnigan and a group of directors are trying to close an agreement with Bank of Scotland's BOS International unit to acquire the business.
"The board has been informed that negotiations continue with respect to that transaction and as material developments occur SFL will make appropriate announcements," the company said in a statement.
Finnigan said an announcement would probably be made on Monday. "We're still in negotiations."
Yesterday in a statement, he announced redemptions of debentures and notes would be halted to protect the integrity of the investments. There had been "a further material decline in the property finance market sector and reinvestment rates" since talks had begun, he said.
The deal needs approval of shareholders of Allco HIT, which is selling Strategic Finance's immediately parent. Finnigan said last month the current owners are "unable to assist in providing the necessary capital we need to run the business and move forward."
The company had assets of $568 million at June 30, with debentures at $320 million. Strategic's 10.52% perpetual preference shares trade on the NZX debt market.
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