Bendigo and Adelaide Bank has demanded that some Great Southern loan defaulters pay out the entire cost of their loans within seven days.
In a letter to an investor grower acquired by InvestorDaily, the bank said failure to pay loan arrears on the due date is an acceleration event under the terms of the loan deed.
"Accordingly, the provisions of the loan deed authorise Bendigo and Adelaide Bank Limited to demand immediate payment of all moneys payable, including without limitation, the principal sum, interest, costs and expenses," the letter said.
Yesterday, Bendigo and Adelaide Bank announced that it was owed about $550 million by 8200 Great Southern investors with an average loan size of about $67,000.
According to a report in the Sydney Morning Herald yesterday, the bank has dubbed those who had missed payments as "strategic" defaulters.
"A number of people are looking to see what opportunity exists to realise value from the existing schemes. You can see by their profiles that they have the ability to pay," Bendigo and Adelaide Bank managing director Mike Hirst said.
However, most defaulters were only in arrears by one and 30 days, with about 2.3 per cent more than 90 days behind.
Great Southern investor action group chair Rob Burns wasn't prepared to comment on the loan default issue.
"We're about getting a commercial outcome, but Bendigo and Adelaide Bank have been quite open to talk about it and I think they'll do what they can do to facilitate a good outcome," Burns said.
Bendigo and Adelaide Bank head of investor relations Will Rayner said Bendigo and Adelaide Bank always encourage customers to contact them if they can't meet the their debt requirements.
"After all, it is in our best interest and the customer's to help them repay their debt," Rayner said.
The bank has established an internal taskforce to oversee the Great Southern portfolio and has created a help centre to manage the questions and needs of the investor growers.
"We will continue to engage with our customers and other relevant stakeholders to find a resolution that meets the needs of all parties," Rayner said.
The letter sent in late July also reminded the investor grower that should ABL Custodian services be required to initiate legal action and if the units in the managed investment scheme investment were sold as part of the action, the investor growers could stand to bear a "significant" tax liability.
"We therefore recommend that you seek independent taxation advice on this," the letter said.
"We trust you will give this matter urgent attention so as to avoid costly legal proceedings, the costs of which will ultimately be borne by you."
