A New Zealand leasing company
has gone into receivership as it was unable to meet the country’s
Reserve Bank capital ratio requirements.
Finance & Leasing, based in
Christchurch, could not meet the requirements in the specified
timeframe, and therefore could not gain approval from the Companies
Office for a prospectus extension, lodged in December.
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It had a year’s notice of the
new regulations and ran down loans in the property sector during
that time. It has been reported that 227 investors are owed about
NZ$17m (€9.6m), none of which was covered by the New Zealand
government’s extended retail deposit guarantee.
Without a registered prospectus
to raise funds from the public, the company was unable to continue
operating, meaning it had no choice but to enter
receivership.
The capital ratio regulations
came into force on 1 December 2010. They require “every non-bank
deposit taker (NBDT) and its trustee to ensure that the trust deed
includes a minimum capital ratio requirement that the NBDT must
maintain, according to the Reserve Bank of New Zealand”.
The minimum capital ratio in the
trust deed must be at least 8% for NBDTs with a credit rating from
an approved rating agency, and at least 10% for those
without.
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