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Strategic wins trustee support for moratorium

Tuesday 2nd December 2008

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Strategic Finance won support from Perpetual Trust and financier BOS International for a moratorium proposal which can now be voted on by stockholders, deposit holders and subordinated note-holders.

The finance company intends putting the proposal to a vote on December 22. Under the plan, Strategic Finance will make quarterly repayments of principal and interest through to December 2013. The moratorium is subject to the company's ability to raise funds as its assets are realised, it said in a statement.

Under the moratorium proposal, interest on investments will be re-set at 8% for all security holders including BOS International.

Strategic expects to appoint PricewaterhouseCoopers as the monitoring accountant during the moratorium.

The proposal "allows Strategic Finance the opportunity to work with borrowers, realising assets on an orderly basis to ensure value is preserved and investor money is repaid if and when funds are available," it said.

Should the proposal be approved, Strategic proposes cancelling all future dividends on the perpetual preference shares until the end of the moratorium.

Strategic froze repayments to 15,000 investors owed $325 million in August.

It wants approval for a managed wind-down of its loan book as an alternative to receivership, after a proposal by a management-led consortium to buy the business from Allco HIT, an Australian investment company, fell through.

By Jonathan Underhill



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