Another New Zealand finance company crashes

Business Materials 10 September 2008 06:09 (UTC +04:00)

One of New Zealand's oldest finance companies, Dominion Finance Group (DFG), has been put into receivership, owing 6,055 debenture holders 224 million New Zealand dollars (about 141 million US dollars), it was announced Wednesday, reported dpa.

Nearly 30 finance companies have now been placed into receivership or are currently unable to repay debts in the last two years in the wake of the international credit crisis.

DFG was incorporated in 1954 and specialized in loans to property developers and other businesses. Trading in its shares on the New Zealand stock market was suspended in June.

Louise Edwards, chief executive of DFG's trustee, Perpetual Trust, said, "We consider receivership to be the preferable course of action as opposed to other alternatives such as a company managed wind-down under a moratorium."

DFG's parent company, Dominion Finance Holdings, criticized the decision, saying it had wanted to present a proposal for a moratorium on interest payments to investors.

It said a receiver had not been appointed to another, smaller subsidiary, North South Finance.