PGC - Licenced to Bank

[Balance]

NZ is going backwards as a country in the global economy because of the lack of funding for businesses. The trading banks here are only interested in lending on mortgages - not businesses, as Mouse has noted. Even property development only happened because of the finance companies.

So opportunities to lend money to good businesses and good credit are plentiful.

Everyone can see the need for a major NZ bank. Marac needs to get it right and the main shareholders will be very careful to get it right - they have serious money at stake. Unlikely to let this one run away.

[Logen Ninefingers]

By all means have Marac focus on lending to business, but why put millions into 'Torchlight' - $75 million alone lent by Torchlight to SCF - for lending to distressed companies. I believe the investors who participated in the capital raising believed that the funds were going towards strengthening Marac with the aim of turning it into a bank. Did anyone believe that a very significant portion of the money raised would be going to something called Torchlight to help it prop up SCF?
I thought the money from the capital raising was required to give PGC/MARAC itself fresh capital.....is there now a spare $75million lying around that can be used to give SCF liquidity?
SCF is a company in very poor health; PGC should concentrate on getting it's own house in order & remain focussed on what it's aims are as they relate to it's own business.

[Silverlight]

ASB securities do allow margin lending for buying shares. Most of it is not 1 for 1, more around 70% of the current value of your shares, they also only do it on 30 -40 securities on NZX.

[percy]

PGC did not lend Torchlight $75 mil. torchlight raised the funds separately.Ker has always said their focus was on getting their own house in order.I believe Torchlight ,s money has first right
before anyone else at SCF.The money raised in capital raising has gone where they said it was going.LN all this information has been avaliale in paper work and reports sent to shareholders.
Only new info is what Mouse found out and a lot is only confirmation of previous reports.

[mouse]

ASB securities do allow margin lending for buying shares. Most of it is not 1 for 1, more around 70% of the current value of your shares, they also only do it on 30 -40 securities on NZX.

ASB was one of the banks I approached. No way was the answer. We only lend on housing. As Balance says, we need banks to lend on business ventures etc. As well as housing. But to put all of their loans into housing seems to me very poor business practice. Their fingers will long term get burnt. Since house prices can go into a tailspin so fast. A builder friend built the $1 million house. Market collapsed, house unsold. Mortgagee sale now. Repeated across NZ. Another friend borrowed for renovations then sale. Same result. Me? I have never failed to pay my debts, yet banks refuse to lend. They are missing good business and sound profits. Hopefully Marac will fill the gaping void in the market. I am sure they will. Good luck to them, and us.

[Balance]

By all means have Marac focus on lending to business, but why put millions into 'Torchlight' - $75 million alone lent by Torchlight to SCF - for lending to distressed companies. I believe the investors who participated in the capital raising believed that the funds were going towards strengthening Marac with the aim of turning it into a bank. Did anyone believe that a very significant portion of the money raised would be going to something called Torchlight to help it prop up SCF?
I thought the money from the capital raising was required to give PGC/MARAC itself fresh capital.....is there now a spare $75million lying around that can be used to give SCF liquidity?
SCF is a company in very poor health; PGC should concentrate on getting it's own house in order & remain focussed on what it's aims are as they relate to it's own business.

LN - do note that it's Pepertual, a sub of PGC, which is involved in setting up Torchlight - not Marac. Nothing to do with Marac.

Torchlight is set up as a fund to invest in distressed assets with money coming from high net worth and professional investors - not from the capital raising!

Nice fees and market presence for Perpetual. PGC's exposure in Torchlight is a $15m line of credit which will be liquidated as funds are raised.

SCF is a company in poor health but amongst its assets are some quality ones. They are ripe for the picking and PGC is in the frontline to pluck them.

Torchlight's loan to SCF is 1st ranking priority fully secured - this loan gets repaid first before anybody else does. Looks pretty good to me.

[Dr_Who]

Mouse. I enjoy reading your posts and like the fact that you are passionate about the things you have invested in. Too much passion can sometimes cloud ones judgement. Banks do lend to businesses. Due to the recent credit crunch, they have just tighten the noose. The time will come in the future where banks will start to lend like there is no tomorrow again and forget there was a financial market crash. If you have a good relationship with your bank they are more flexible.

Dont forget that high risk lending usually end up when tears with the market turns. The recent fall of finance companies is prove of the risk in lending to high risk ventures.

Take a look at this site.

Failed Bank List
http://www.fdic.gov/bank/individual/.../banklist.html

[zigzag]

A second KiwiBank ... I think there's room in the market

I don't think Marac intends to be a second Kiwibank. Kiwibank is a like a retail bank with many streetfront branches. Marac is looking to be more of a niche player. In fact Kiwibank and Marac already co-operate in some areas.

[Silverlight]

ASB was one of the banks I approached. No way was the answer. We only lend on housing..

https://www.asbsecurities.co.nz/section15.asp

[biker]

By all means have Marac focus on lending to business, but why put millions into 'Torchlight' - $75 million alone lent by Torchlight to SCF - for lending to distressed companies. I believe the investors who participated in the capital raising believed that the funds were going towards strengthening Marac with the aim of turning it into a bank. Did anyone believe that a very significant portion of the money raised would be going to something called Torchlight to help it prop up SCF?
I thought the money from the capital raising was required to give PGC/MARAC itself fresh capital.....is there now a spare $75million lying around that can be used to give SCF liquidity?
SCF is a company in very poor health; PGC should concentrate on getting it's own house in order & remain focussed on what it's aims are as they relate to it's own business.

Logen Ninefingers, with all due respect, may I suggest you do some home work on this company, before making uninformed posts like this?