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Deposit Holder Name
Deposit Holder Address
Deposit Holder City
18 December 2014
Subject: Prometheus Finance Limited (In Receivership) - “the
Company”
Introduction
We write to advise that John Howard Ross Fisk and Jeremy Morley were appointed receivers of the
Company on 17 December 2014 under the terms of a Trust Deed giving the secured party a security
interest in all of the assets and undertakings of the Company. The request to appoint receivers
follows efforts made by the directors to raise capital in order to support growth plans of the
Company. These efforts have fallen short of achieving the level of capital required to the extent that
the directors believed the Company was at risk of breaching the minimum capital adequacy covenant
in the Trust Deed in the near future.
We are writing to you in your capacity as a debenture and/or deposit holder in the Company.
Since our appointment as receivers we have focussed on ensuring the key assets of the Company
remain secure and are managed appropriately, while gathering information from the Company’s
systems that will allow us to form a view regarding a realisation strategy for these assets. While the
receivership process is very much in its infancy, we take this opportunity to advise you of the
receivership and to provide you with a summary of the high level information we have received to
date.
Events following our appointment
Following our appointment as receivers we attended the Company’s premises to secure the records
and assets of the Company. Our actions have included:
-
Communication with the Directors and with the employees of the Company;
-
The freezing of all bank accounts of the Company;
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Securing all records of the Company held on the premises and obtaining an electronic backup copy of the Company’s computer records;
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Gathering and collating the financial information of the Company;
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Notifying the Companies Office of our appointment; and
-
Commencement of discussions with management in order to understand the composition of
the loan book, which in turn will allow us to develop a realisation strategy for this.
PricewaterhouseCoopers, 113-119 The Terrace, PO Box 243, Wellington 6011, New Zealand
T: (04) 462 7000, F: (04) 462 7492, www.pwc.com/nz
Financial position of the Company
The table below summarises the financial position of the Company as at 31 March 2014 (per audited
financial accounts), 30 September (per non-audited financial accounts), and 30 November (per
management accounts). We emphasise that we have relied upon the information provided to us and
have not independently verified or audited the information presented.
Prometheus Finance Limited (In Receivership)
Summary Balance Sheet
($'000's)
Mar-14
Audited
Assets
Cash at bank and term deposits
Loans and advances
Non-financial assets
Total Assets
1
2
15,695
5,286
73
21,054
16,249
5,945
107
22,302
16,796
5,979
112
22,886
3
19,237
183
19,420
20,651
174
20,824
21,176
114
21,290
1,635
1,477
1,596
Liabilities
Customer deposits
Other liabilities
Total Liabilities
Equity
Sep-14
Unaudited
Nov-14
Mgmt Accts
Source: Management Information and audited accounts
The key elements of the statement of financial position are as follows:
1.
Cash at bank and term deposits
On appointment the receivers made contact with the Company’s bankers, requesting a summary
of funds held. Funds held at appointment were $16.8m including accrued interest. Of the funds
held, $0.6m is held in cash, with the remaining $16.2m being held on term deposit with varying
maturities. We are currently reviewing term deposit arrangements in order to assess the
financial impact of accessing these funds prior to maturity.
2. Loans and advances
The loan book comprises both commercial loans and consumer loans.
Commercial loans are loans to businesses used either to fund working capital or for the purposes
of funding specific projects. In addition, there are a number of residential property loans secured
by way of mortgage. These loans comprise 95.3% of the loan book (i.e. c.$5.7m at November
2014).
Consumer loans are provided to individuals to fund specific asset purchases (for example, solar
panels). These loans comprise approximately 4.7% of the loan book (i.e. c.$0.28m at November
2014).
At this stage it is too early to estimate the likely recoverable value of these loans and advances.
PwC
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3. Customer deposits
The customer deposits balance of $21.2m at 30 November 2014 includes accrued interest. On
appointment the receivers received an updated figure from management stating that current
customer deposits totalled $21.0m (including accrued interest) and represents approximately
920 investment balances held.
Next Steps
Following the initial gathering and collation of the financial information of the Company and
completion of the initial administrative tasks essential to the receivership the likely next steps are as
follows:
-
As mentioned above, the receivers will assess the financial impact of breaking the $16.2m of
funds held on term deposit prior to maturity, before developing a strategy which in our view
will maximise realisations to deposit holders, and to other creditors.
-
We will commence a sales process for the loan book of the Company, either in whole or in
part. We will also utilise our wider PricewaterhouseCoopers network throughout New
Zealand and Australia to identify any further potential interested parties.
-
While it is too early in the process to provide deposit holders with an estimated recovery
range, we will provide further updates on this in due course, together with an estimated
timeframe to complete the receivership. We do note, however, that based on the book value
of the assets in all three scenarios above, that the Company was solvent, meaning that
depositors would receive repayment in full. However, this will be conditional upon those
assets realising the book values shown as any lesser recoverable value would diminish the
equity and may restrict payment in full to depositors.
Concluding comments
We are conscious that deposit holders will be seeking repayment of funds invested as soon as
possible and we are working hard to recover funds for the benefit of deposit holders in a timely,
efficient and orderly manner. As noted earlier, a significant portion of the Company’s assets are held
in cash and bank deposits meaning that once these assets are collected we may be in a position to
make an early distribution to deposit holders.
We will endeavour to keep deposit holders updated on a regular basis and expect to issue a further
report early in the new year, by which time we hope to be able to provide you with some guidance as
to the likely nature and timing of future distributions to deposit holders. In the interim, should you
have any queries arising from this report, please contact the receivers in writing by submitting an
email to [email protected], or by post to the following address:
Prometheus Finance Limited (In Receivership)
PricewaterhouseCoopers
PO Box 243
Wellington
Attn: Richard Nacey
Facsimile:
+64 4 462 7492
Website:
www.pwc.co.nz/prometheusfinance
PwC
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Yours faithfully
Prometheus Finance Limited (In Receivership)
John Fisk
Receiver
PwC
Jeremy Morley
Receiver
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