St Laurence Limited Recapitalisation Plan
Background to the Plan
In June 2008, following a significant and rapid deterioration in the property and finance markets, St Laurence Limited (SLL) withdrew its prospectus and suspended repayments to investors while a strategy was developed to resolve the situation which would be in the best interests of SLL’s Secured Debenture Stock (SDS) and Capital Note investors.
In November 2008 SLL sent to its SDS and Capital Note investors the resulting proposal contained in the Recapitalisation Plan document dated 11 November 2008. This document is available to download and view here and further background information is provided on pages 6 and 7 of this document.
On 5 December 2008 the proposal to vote to amend the Trust Deed for SLL was approved by SLL’s SDS and Capital Note investors. The Resolutions, as put to SDS investors were passed by 95.86%, and as put to Capital Note investors by 99.64%.
What payments have been made to investors since the Plan was approved?
Payments made to date have been:
- 12 December 2008 - SDS interest for the period from 1 July
2008 to 5 December 2008, and Capital Notes interest from 1 May 2008 to 5 December 2008. This covers
the period when SLL was putting together the Recapitalisation Plan and interest was
accruing.
- 1 April 2009 – SDS principal of 2 cents per dollar
and Capital Note principal of 1 cent per dollar.
- 1 July 2009
- SDS principal of 2 cents per dollar and Capital Note principal of 1 cent per dollar.
- 1 October 2009 - SDS principal of 2 cents per dollar and Capital Note
principal of 1 cent per dollar.
- 5 January 2010 - SDS principal of 2 cents per dollar and Capital Note principal of 1 cent per dollar.
Why is funds management so crucial to the success of the Plan?
The funds management core of the business now makes up 60% of our assets and provides regular income in the form of management fees. The preservation of value in our funds management operations has become our main focus and considerable management effort has gone into stabilising the balance sheets of St Laurence Property & Finance Limited and The National Property Trust, the two key funds that we manage and have ownership stakes in. The Plan relies upon SLL not only preserving the value of these key assets but also in adding value by undertaking new initiatives. At present we believe we can achieve better risk-adjusted returns from investing in funds management activities than in, for example, lending. For the moment all new initiatives will be dedicated to growing the value of our existing investment stakes and/or growing the value of our management contracts.
What has been done to cut costs?
Our key focus is now on returning SLL to profitability and this has included repositioning the
business so as to minimise operating costs. As part of this process we made redundant a number of
positions associated with our lending and fund raising activities. We are also continually reviewing
all overhead costs to achieve savings. Some will be noticeable and may impact on our level of
service to investors. For example, we will be implementing a change to the way we deliver year end
results to investors. Rather than mail a full printed Annual Report to every investor we will
provide an update and a summary of the financial results.
The audited financial statements to 31
March 2009 are available to view and download from the Library in this website or a
hardcopy can be ordered from our office.
How can I get information on how you are progressing with the business?
The Board and management will keep investors informed by way of investor updates from time to time. Where possible these will be mailed with the quarterly distribution advices and posted on this website. We will also prepare a set of accounts for each financial year, which will be available after the 31 March year end once the audit has been completed. Both the investor Updates and audited Financial Statements, as they are finalised, will be available to view here.
Is there a chance of faster repayment if things go well?
We have calculated repayment based on likely cash flows, and don’t believe we will see investors repaid more quickly than planned. If not repaid earlier there is a prospect of additional annual payments from 2014 onwards through the exercise of the put option granted by Auguste Finance Limited to some investors. Further information about Auguste and the put option is provided on pages 7, 8 and 9 of the Plan document.
How will any profit SLL makes going forward be allocated?
This will be allocated to repaying investors and to carrying on the business so as to preserve and maximise value and hence the return to investors.
When the Plan was approved were new Certificates issued to investors?
Yes, in late December 2008 existing SDS certificates were replaced with Class A and Class B SDS certificates. Investors therefore received two certificates for each SDS deposit held with us. Capital Note holders did not need a new certificate but received a separate letter confirming their holding at the same time.
Will investors receive quarterly statements and an annual tax statement?
Investors will receive statements each quarter to show that principal payments have been made. However, as scheduled repayments are initially principal only, they will not receive an end of year tax statement on an ongoing basis while interest is being accrued. Once interest is paid out we will then provide a tax statement.
Can I transfer my SLL investment?
Yes, upon receipt of completed transfer documentation (available from our office) we can transfer your investment to another person or persons. Please note that if you wish to split your investment between multiple persons, the minimum Class A SDS holding is $700 and the minimum Class B SDS holding is $300. The minimum holding for Capital Notes remains unchanged at $5,000. Exceptions will only be made where principal repayments have resulted in the outstanding principal held by an Investor being less that these amounts.
How does the Plan apply to the Dual Currency Debenture Stock I held?
SLL Dual Currency (NZD/USD) Secured Debenture Stock converted from US dollars into NZ dollars on 31 October 2008 as scheduled at the current spot rate on the date of conversion of $0.595 (or at the rate applicable on the day if an investor selected an earlier conversion date). The Dual Currency Debenture Stock is now incorporated into the NZD Debenture Stock registry and the same principal repayments and interest accruals apply (refer page 11 of the Plan document).
If the above information does not answer your queries please email our Client Services team at office@stlaurence.co.nz