The failure to secure a buyer to inject funds into Elderslie Finance Corporation (EFC) has forced Perpetual Trustees WA (PTWA) to appoint receivers to the group.
PTWA, a fully owned subsidiary of Perpetual, appointed PricewaterhouseCoopers (PwC) receivers Gregory Hall and Philip Carter to the structured finance and investment management group late yesterday.
PTWA called in receivers in its capacity as trustee for secured debenture holders of EFC.
"We explored a series of options with EFC before making the decision to appoint a receiver," Perpetual general manager trust and fund services Chris Green said.
"Unfortunately, a sale involving a significant cash injection did not eventuate and we ultimately had no option but to take enforcement action to protect the assets available to debenture holders against any further erosion."
PTWA became concerned with EFC's activities after the firm issued a prospectus in February 2008 following the introduction of ASIC's guidelines to improve disclosure to retail investors.
Based on information in the prospectus, PTWA appointed PwC as investigative accountants in April to assess the company's financial position.
In May 2008, PwC produced a report which suggested EFC was or would become insolvent unless EFC received a cash injection to meet its short-term liquidity requirements. If EFC was insolvent the report concluded there could be a deficiency in assets over liabilities and, as a result, a significant shortfall in the security position of secured debenture holders in EFC.
Prior to appointing a receiver, PTWA formed the view on the merits of a number of sale proposals, which would facilitate an injection of capital into EFC. The possible sale never eventuated.
PwC and Perpetual will send letters to debenture holders providing further information on Elderslie.
