Finance company's rescue plan frustrated

Monday 28th January 2008

Propertyfinance Group's (PFG)attempts to get its finance company subsidiary out of receivership have been frustrated at the last minute.

A plan to retire the Propertyfinance Securities receiver was agreed to by stakeholders in December, as long as a number of conditions were met.

Propertyfinance Group managing director Darryl Queen says "over the last 10 days, and with the support of a range of stakeholders in the wider group, the company was able to meet all of those conditions allowing settlement to occur."

The final step in the process was for PFG to drawdown a pre-arranged bridging facility so that it could inject, by way of capital, $710,000 into Propertyfinance Securities.

"The board is now very disappointed to have to advise that the lender of the bridging facility has in turn been impacted on by the widely reported challenges and uncertainties in both the domestic and international financial markets and is unable to advance the loan facility."

Queen says it is unclear whether "this will be a temporary issue of a few days or develop into a permanent position."

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