Provident receivers set August 13 date for information session and seeks managers for two mortgage funds

The receivers of failed fund manager and lender Provident Capital are seeking managers for two of its frozen mortgage funds and have also announced that an “informal” information session will be held for debenture holders on August 13.

Phil Carter, Tony Sims and Marcus Ayres from PPB Advisory, who were appointed on July 3 following a Federal Court order, have placed an advertisement in the Australian Financial Review calling for indicative offers to be the responsible entity and manager of the Provident Capital Monthly Income Fund and the Provident Capital High Yield Fund.

There are around 520 unitholders for both the monthly income and high yield funds, which collectively hold around $32 million of funds under management.

Indicative offers are due by August 21.

This advertisment is part of expression-of-interest campaigns for the sale of part of Provident's assets and business launched by PPB Advisory since its appointment.

PPB Advisory has also announced that an information session for all debenture holders will be held at 10.30am at the Wesley Conference Centre at 220 Pitt Street in Sydney on Monday, August 13.

Victorian debenture holders can attend a telecast of the meeting at the Rydges Hotel, 186 Exhibition Street in Melbourne; Queensland debenture holders can attend  at the Christie Conference Centre Caribbean Room at 320 Adelaide Street in Brisbane; South Australian debentures holders can attend at the Hilton Hotel Victoria Room at 233 Victoria Square in Adelaide (10am South Australian time).

For those debenture holders in Perth, a meeting will be held at the Hilton Hotel Swan Room at 14 Mill Street (8.30am Perth time).

The receivers have stressed this is an "informal information session only".  

"No binding resolutions on the debenture holders will be passed and attendance or non-attendance will not impact your rights or claims as a debenture holder in any way."

As many as 3,500, mainly small investors have about $130 million invested in debentures with Provident Capital.

The receivers have also commenced developing asset management strategies for each non-performing loan and commenced investigation into the affairs of the company and what claims may be available  against third parties.

Around 85% of Provident loans were six months or more in arrears, according to its most recent financial booklet prior to its collapse.

The receivers are currently preparing an application to the Federal Court to confirm the methodology proposed to pay future distributions, but have warned of a shortfall on the principal amount owing to debenture holders and have determined that it would be “inappropriate for any future distributions to include an interest component”.

“Subject to the Court’s approval, to ensure all debenture holders are treated equally, all future  distributions to debenture holders during the Receivership will be made on a pro-rata basis in reduction of the face value of debentures,” say the receivers.

Property Observer has heard from borrowers who have complained that prior to the collapse of the lender, they had received little communication about even basic things such as the size of their debt, while being charged tens of thousands of dollars in roll-over fees.