INVESTORS in the collapsed Banksia Securities have started receiving partial repayments, but will only receive between 50 and 65 per cent in returns.
The first instalment – of 20 cents in the dollar – was deposited to investors yesterday, almost two months after the regional financial group went into receivership.
Receivers McGrathNicol confirmed that they expected to make a second distribution to Banksia debenture holders before 30 June 2013.
But receivers yesterday could not guarantee the timeline of when the total 50 to 65 cents in the dollar would be received.
The amount of distribution for investors was also unclear, with receiver Tony McGrath saying it was “dependent upon the progress achieved with respect to realisation of loan portfolios”.
Maiden Gully resident Barry Taylor had $430,000 tied up in Banksia and said the repayment of 50 to 65 per cent was “nonsense”.
“Considering what they had in their loans I think that stinks. We certainly won’t take it lying down,” he said.
Mr Taylor, who has had to push back his retirement, said he would take the matter further with directors.
“We’ll consider launching legal action against the directors. As far as I’m concerned, these people need stopping.”
Receivers confirmed Banksia had outstanding commitments to debenture holders of $663 million as of October 25. More than 3000 investors, mostly across regional Victoria, were affected.
After analysing Banksia’s assets and loan books, receiver Tony McGrath said it was clear Banksia’s failure was in part due to property prices.
“The receivers attribute the failure of the companies to several factors including a general reduction in property values, difficult credit market conditions, inadequate provisioning in the loan books and a mismatch between the timing of debentures due for repayment and the recoverability of borrowers’ loans,” Mr McGrath said.