8 Aug 2008

Strategic Finance freezes funds

6:52 am on 8 August 2008

Strategic Finance is the latest finance company to stop investors from withdrawing their money, as the property finance market and reinvestment rates slump further.

Last month, Australian owner Allco HIT announced a consortium, including senior management, planned to buy Strategic Finance.

Strategic Finance says buyout talks are still ongoing, as a consortium of the finance firm's original owners, senior management and banker, BOS International haggle over the details with Australia's Allco HIT.

The company says it understands the deal will also involve a capital restructure, which will need the approval of investors.

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

Strategic Finance is the latest company to act. To protect investors while the talks continue, it's stopping investors pulling out their money and is no longer accepting new subscriptions.

The company owes about $325 million to about 15,000 debenture holders.

Strategic Finance expects to say more on Friday.