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Lombard considers delisting, sale after restructuring

Wednesday 24th September 2008

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Lombard Group, whose main operating unit was put in receivership by its trustee, is considering whether to de-list from the NZX or be sold.

As part of a restructuring since the receivership, the company has made almost all staff at Lombard Finance redundant, consolidated its remaining mortgage management businesses into one and moved to cheaper premises, it said in a statement.

"The directors and principal shareholders are also considering whether Lombard should continue to be listed on the main NZX board, move to another board, be de-listed or even be privatized," chief executive Michael Reeves said in a statement. "We are carefully considering all opportunities that are in the interests of shareholders," he said.

Receivers for Lombard Finance & Investments this month said debenture holders will get between 19 cents and 40 cents in the dollar.

Receivers John Waller and John Fisk cut their estimate after an assessment of Lombard's loan book, which was valued at NZ$136,714 as at March 31. They reduced the recoverable range to NZ$29 million-to-NZ$53.7 million in May and have cut the estimate further to NZ$26.8 million-to-NZ$49.5 million as at August 31.

Shares of Lombard last traded at three cents on Sept. 12 and have declined 96% this year.

The receivers said some 4,000 debenture investors probably won't receive any payments this year.

More than 20 finance companies have either failed or sought a moratorium on payments to investors in the past two years.

By Jonathan Underhill

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