Latest Report – 31 March 2010
Reviewing the recent report is further fairly gloomy reading for investors.
The mortatorium was implemented in August 2009 and now in Feb 2011 we have the following facts:
37% of the principal has been repaid – but the rest of the money is a long way off, up to five years.
Is it what you expected from your 2 year moratorium? Remember that Somers-Edgar’s Matrix is being paid $27,000 per month yet the are failing to deliver. Does that surprise anyone?
Orange Finance was marketed as “First Ranking Secured Deposits” being offered in response to “demand, from investors, for a prudently managed non-bank investment”.
Investors were rewarded with an interest rate only marginally better than they would receive at a traditional bank with billions in assets.
The promoters definition of a prudent investment was a bank that had
- Only 28 loans – almost all of them purchased off an ailing related party.
- Around 22% of its loan book in default
Launched in 2003 it purchased most of its loan book from First Step:
2004 $18,907,000
2005 $28,942,000
2006 $36,623,000
2007 $ 4,112,000
Total $88,584,000
The Trustees at FirstStep must of been grateful to have a willing purchaser of their loans – especially as they were under pressure to make repayments prior to the funds suspension in December 2006.
It is not clear how fair market value was established for these loans but ultimately Orange Finance investors have been left with a $20m lemon.
Orange Finance is currently operating in moratorium.
The moratorium includes the following unique features:
• Mr Somers-Edgar was retained as sole director.
• Mr Somers-Edgar’s own company, Matrix Funding, was employed for $27,000 per month for 2 years to manage the recovery of the 18 outstanding loans. Others in the industry have stated they would do this for $5,000 per month but no attempt was made to make this function contestable.
• Mr Somers-Edgar purchased a $1m loan which is paying 18% interest from Orange Finance for $1m. No attempt was made to realise more for this despite it commanding a large premium interest rate.
There have been no promises of further payments – investors need to sit tight and hope that the amounts recovered exceed the fees charged by Matrix, Korda Mentha, Grant Thornton & Covenant Trustees.
source: Orange Finance Investment Statement Sept 2007 /
First Step Financial Accounts
Orange Finance Moratorium documents
Note: Prospectuses and Trust Deeds are available at www.companies.govt.nz.
Search for Orange Finance in the Companies register
I have received notice that I have been repaid more than I recall receiving, but the payments are so few (and little) that i’m in danger of forgetting that Orange ever existed.
Doug Somers-Edgar won’t suffer, those at the top of the pole never seem to.
Yes!! just received quarterly report from Orange Finance .Quarterly Report ended 30 th June 2010 ….NO quarterly payment will be made due to the difficult times in the market.
Once again Doug Somers-Edgar is fobbing everyone off again ///,He should be held accountable for his bungling of the industry, I now hear the SFO are at long last investigating him.
I hope in time they put him through the hardship that we are all facing.