THE largest mortgage fund on the Northern Rivers ceased accepting new investments last week, but has declined to comment on whether it is in financial trouble.
Following a difficult year, the widely-respected Mayne Investments Limited has announced $29 million in outstanding loans could shift into arrears in the coming months prompting the shutdown.
Mayne was formed in Lismore in 1968 to assist regional home buyers having difficulty securing mortgages with the mainstream banks.
Earlier this month the 42-year-old fund announced it was reassessing its circumstances following the voluntary administration of its single largest borrower, Slipway Properties Pty Ltd, in December last year.
Slipway, whose directors included developer Chris Condon and nine others, had just failed in its lengthy battle in the Land and Environment Court with Ballina Shire Council to rezone 95 of its 115 Ramada Hotel units to allow permanent residency.
The rezoning would have provided Slipway an opportunity to re-market a proportion of its remaining units in order to shore-up the property’s falling value.
A few days after Slipway lost its appeal, Mayne appointed receivers PPB Advisory to handle the administration.
When Mayne publicly announced the loan default by Slipway on December 14, it said it was closely monitoring the situation but did not believe the loss would impact on the fund’s overall performance.
Chief executive officer Greg Anderson declined to comment yesterday, explaining the company’s financial year was only four working days away.
“The board will be issuing a full report of the fund’s performance at that time,” he said in a statement.
“Until that report is made available to our investors, we are unable to make any other comment, other than the information already available on our website.
“We will be happy to furnish you with a copy ... at that time.”
The latest turn of events follows a difficult three years for Mayne Investments, and all mortgage funds, following the global financial crisis in 2008.
The Federal Government’s move to secure bank, building society and credit union deposits forced many mortgage funds to suspend redemption requests in order to avoid a panic run by investors and prevent them going under.
Mayne managed to maintain quarterly distributions throughout the crisis, as well as initiate a regime of partial redemption offers.
MAYNE’S PUBLIC DISCLOSURE
May 19, 2011: “Having reviewed its current loan book in light of recent developments, and in the absence of any unforseen circumstances, Mayne has another $29 million in loans that may move into arrears in the coming months. In the circumstances the board has determined that until it has properly assessed the impact of these arrears (if any) it is appropriate that the Fund cease accepting new investments.”
Source: Mayne Investments Ltd website
Funds under management: $211,531,574 (Source: Mayne Investments Ltd annual report 2010)
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