Finance company St Laurence says it can no longer meet its scheduled moratorim payments and is putting forward a proposal for investors to swap debt for equity in a related company.

The board said today that St Laurence would soon run out of equity due to the “extremely difficult” property market. Managing director Kevin Podmore said in a letter to investors the company would soon become insolvent.

Private Bin understands that Strategic Finance, which yesterday disclosed a staggering un-audited first half loss of $99.8 million, is close to announcing a debt-for-equity swap deal with another company.

Strategic, which owes debenture-holders about $280 million, bond-holders $23 million and perpetual shareholders $50 million, needs a potential Hanover-style debt-for-equity deal to avoid receivership.

Orange Finance investors will receive an initial payment of 15c in the dollar after today voting in favour of a proposed moratorium plan at a meeting on Auckland’s North Shore.

The plan will save the troubled company from the receivers but whether it will actually benefit its investors remains unclear.

Investors will receive their first payment next week, but today Orange Finance could not definitely say when or whether there would be another payment.

Strategic Finance’s trustee has scrutinised – and green-lighted – the company’s deal whereby it initiated a mortgagee sale then lent funds to the new buyer.

Last month, while Strategic was trying to persuade investors owed more than $400 million to accept a moratorium on repayments, it lent $31 million to Christchurch-based developer Phillip Burmester to buy the luxury Bendemeer subdivision in Queenstown.

Boston Finance is set to repay investors another $2.9 million of their capital today as part of a moratorium that is moving at a snail’s pace.

Boston won investors’ vote for a moratorium back in March, based on forecasts that it would have repaid 77c in the dollar of investors’ $38.5 million by the end of this year.

But today’s payout takes their total returns to just 21c in the dollar, well behind the forecasts.

The moratorium was meant to last only 20 months and return full capital plus 9% interest.