NZ's Strategic Finance to be sold, refinanced
WELLINGTON, Sept 1 (Reuters) - A consortium of managers and former owners has struck a deal to buy troubled New Zealand finance company Strategic Finance Ltd from Australia's Allco HIT AHI.AX, the company said on Monday.
Strategic, which has listed debt securities (SFLHA.NZ) and holds around NZ$330 million ($231 million) in investor funds, last month suspended repayments and stopped taking new investments to protect investors amid deteriorating financial markets.
New Zealand's NZ$18 billion non-bank finance sector, which is involved mainly in consumer and property lending, has suffered from a slide in investor confidence and higher lending costs due to the global credit crunch.
Over the past two years about 25 non-bank finance companies and fund managers in New Zealand have collapsed or sought to delay and restructure repayments of deposits worth around NZ$4 billion ($2.8 billion).
The consortium, which also involves a subsidiary of the Halifax Bank of Scotland HBOS.L, will pay Allco HIT NZ$25 million in cash and transfer 8 million shares owned by various Strategic executives. Allco shares closed at 10 Australian cents on Friday.
The new owners will inject NZ$15 million, while HBOS will increase Strategic's debt facilities by NZ$50 million to NZ$150 million. Strategic will also buy out some loans jointly held with Allco.
The rescue package relies on investors holding Strategic's debt agreeing to the restructure and reinvestment of their holdings. ($1=NZ$1.43) (Reporting by Gyles Beckford)
