28 Jan 2010

Strategic Finance investors warned over unsolicited offer

6:59 am on 28 January 2010

The Securities Commission is warning investors in troubled finance company Strategic Finance to be wary of a unsolicited offer to buy their holdings.

Strategic Finance owes $325 million to 15,000 investors. Earlier this month the company missed its first repayment under its moratorium plan and is now in negotiations with its trustee, Perpetual Trust, which could result in it being put into receivership.

Marchmont Securities Trust has sent letters to investors, offering to buy up to $5 million worth of Strategic's debentures from investors for 10c in the dollar.

Investors have been told by Strategic they'll get between 85c and 93c in every dollar invested.

The Securities Commission says it's very difficult to accurately assess the value of the company's debentures when it's in a moratorium, and investors should be cautious of any unsolicited offer to purchase their investments, especially where the offer is well below face value.

Separately, Perpetual Trust has already warned investors about the offer, describing it as opportunistic.