EFS pay-out of 70-80c possible

Press, 4 March 1989, Page 28

EFS pay-out of 70-80c possible

By

NICK BROWN

of NZPA

in Sydney The receiver of Equiticorp Financial Services, an Australian subsidiary of the collapsed Equiticorp group, estimates the company’s creditors will receive between 70c and 80c for each dollar they are owed — subject to certain loans being recovered. Mr Martin Brown, of Coopers and Lybrand in Sydney, has written to EFS debenture holders this week saying he had completed his initial investigation into the company’s affairs. Shortfall in the distribution results from debts owed by other Equiticorp companies and other loans considered unlikely to be recovered. It was previously reported that EFS had sAustlB million (about SNZ23M) tied up in loans and investments within the Equiticorp group. EFS affairs are understood to be easier to sort out than other Equiticorp companies because its creditors are virtually all debenture holders who are owed about sAust76M. Mr Brown says it appears unlikely that funds would be available for interest accruing since the company’s provisional

liquidator was appointed on January 23. His estimate of a distribution between 70c and 80c in the dollar is based on his “understanding of the likely result of a considerable number of issues” which are unresolved. Mr Brown expected the first instalment of 10c in the dollar to be paid in April, but the timing would depend on a court’s direction as there was little legal precedent on which to make a decision. He also estimated that up to 50c more in the dollar would be paid in 1989, depending on the receipt of funds from company clients. Mr Brown added that a number of inquiries had been made in response to advertisements to sell the company as a going concern. Tenders for the sale close at the end of March, If a sale of the company’s asset was not achieved, he expected dividend payments to continue over the next five years as loans matured and were collected. A company called Ross Securities, of Victoria, has offered to buy up to 4.9 per cent of EFS debentures at an unspecified discount.