Fincorp’s secured investors will fare better than expected after the listed Becton Property Group (Becton) announced it has bought nine out of the company’s 10 properties for $170 million.
Around 7000 secured noteholders will receive a cash dividend of 50 cents in every dollar, compared to initial estimates of only 30 cents.
Around 1000 unsecured noteholders owed $23 million, however, are still expected to receive nothing, administrators KordaMentha said.
Fincorp went under in March owing 8102 retail investors $201 million and banks $95 million.
Becton beat more than 20 unnamed fund managers and property developers bidding for the portfolio, which includes a mix of residential, retirement and commercial development sites in Queensland and Victoria.
The remaining property, Corinna Waters, was sold to AV Jennings for $35 million.
First-ranking and secured noteholders can reinvest their proceeds into Becton’s Office Fund for a price of 55 cents for every dollar – a premium of 10 per cent on the cash out price.
It takes the total sales from the Fincorp properties to about $205 million.
Becton said it plans to achieve an end value of the properties of more than $470 million.
The acquisition will be funded through debt from the group’s activities.
KordaMentha agreed to accept Becton’s offer because of the value and flexibility it provided noteholders, KordaMentha’s David Winterbottom said.
“Gross realisations of $205 million is a very good result in the circumstances, and the return to first ranking noteholders will significantly exceed initial estimates,” Winterbottom said.
Fincorp raised capital from 2002 to 2006 directly from the public to fund its loans to property developers.
The average age of the investors is 60 and the average amount invested per person is $24,800.
Over-valued properties and bad management were given as the reasons for the group’s collapse.
