Banksia Investors Receive First Payment

It is a piece of good news for Banksia investors.

Debenture holders of Banksia have been informed that they would get 65 cents for every dollar that they invested with the collapsed non-bank lender. This was the announcement made by receivers McGrathNicol.

Initially, debenture holders would receive an initial 20 cents for every dollar. An additional 10 cents for every dollar would be given by June 30, 2013. McGrathNicol has yet to announce the payment period for the remaining amount.

The receivers have already completed their investigation on why Banksia Securities Limited failed. McGrathNicol has made the full report available in its website.

According to Tony McGrath, several factors contributed to the collapse of Banksia, which included challenging credit market conditions, property values reduction, timing mismatch of repayment of debentures and recoverability of the loans.

The investigations also showed that Banksia owed as much as $663 million to debenture holders and outstanding loans of some $527 million.

Banksia collapsed late October with McGrathNicol taking over to investigate the collapse and review the papers.