12 Aug 2008

Strategic Finance reveals restructuring plan

5:49 am on 12 August 2008

After much speculation, Strategic Finance has released the detail of a capital restructuring plan it is proposing.

The company froze redemptions last week, stopping 15,000 investors from taking out a total $325 million.

The finance company's shares were suspended for the third day on Monday, pending an announcement over its buy-out.

Strategic Finance says that under the proposed restructure it would pay debenture holders 30% of their money over the next three years.

The balance of debentures would be invested in five-year listed bonds.

The company says the restructure still depends on its owner, Allco HIT, clinching a buy-out deal with a consortium of company management and a subsidiary of BOS Australia.

Since the talks began in mid-July, the news from the property market has worsened, spurring jittery investors to try to get their money out of any firm or fund associated with it.

Strategic Finance has not given any indication of when it expects the deal to be finalised, but says it will make a more detailed announcement when this occurs.