Three cents return for investors
IT'LL be a lean Christmas for investors in Coffs Harbour debenture issuer, LKM Capital, with the latest report on the recoverability of $63 million revealing investors can expect a return of just three cents in the dollar by late December.
The report from receiver Ferrier Green Krejci Silvia has found the anticipated return for investors in LKM Capital is between 41 and 60 cents on the dollar, with future distributions expected to be made over a three-year time frame.
But even the lifeline of three cents in the dollar before Christmas may not be realised, due to an outstanding loan repayment.
“We have now developed a realisation strategy for each asset held by LKM and we are now in the process of realising LKM's assets,” receiver Andrew Cummins said.
The receiver claims the assets, which include a sub-division in Coffs Harbour and two commercial properties in Sawtell, will need to be sold individually to recoup the money invested by 1180 investors, and certain projects in the LKM loan book require more than $3 million to complete to ensure the assets realise their full value.
One offer for the properties in Sawtell has been rejected, although the receiver is negotiating another offer at this time.
Two properties on the Mid North Coast are held with joint venture partners that the receiver is endeavouring to exit.
“If we are unable to negotiate an acceptable exit with the joint venture partners, then the realisation of LKM's interest may not occur for a number of years,” Mr Cummin told the Advocate.
The latest report states that the receiver is 'unable to budget with any certainty' for further distributions past June 2009, although further updates on the realisation program are expected in April/May and further budgeted distributions will be heading for investors' pockets in June.
The receiver said an earlier commitment of hosting a Debenture Holder meeting is contingent on whether investors call for the meeting or not, with the cost of the meeting estimated at $20,000.
“At this stage we see no specific reason for holding a meeting other than to explain the contents of this report and previous reports, which we are happy to do so if requested,” Mr Cummins said.
Discussions are still underway with relevant parties about LKM investors receiving Centrelink benefits, and Mr Cummins said debenture holders will be advised once the negotiations are complete.