INVESTORS in Gippsland Secured Investments will have to wait until at least Tuesday to find out if they will be able to access their deposits or if the company will be placed in the hands of receivers.
GSI has provided the Trustee with information on its non-binding recapitalisation proposals, which include involvement by businesses and investors from Gippsland.
While that information does not fully satisfy the Trustee, GSI’s directors are working with its advisers, the Trustee and other parties to as quickly as possible achieve what GSI hopes will be the optimal outcome for investors.
The Federal Court has granted GSI and the Trustee an adjournment of proceedings until next Tuesday and redemptions of GSI Notes remain suspended.
GSI managing director Glenn Sanford said the company had been overwhelmed by the level of support it had received from those who had undertaken to inject capital into the company as well as from investors generally.
“The way the community has rallied behind us in wanting a future for GSI has been terrific and we’re working hard on a viable plan to put to the Trustee and the court next week,” Mr Sanford said.
GSI suspended redemptions on all its ‘at-call’ and ‘term’ investment accounts on Friday, July 19 when the company advised investors that as a result of a loan review being conducted in consultation with the Trust Company, further redemptions had been suspended.
The mortgage fund company’s default rates for investments had increased more than five-fold in the past two years.
In response a group of local businesses launched an effort to raise an additional $7 million to recapitalise the firm and avoid the need for GSI to be put in the hands of receivers.
On August 6 GSI announced the Trustee had requested a recapitalisation proposal incorporating binding funding commitments and meeting other guidelines no later than 9am last Monday.
GSI has issued statements stating it will keep investors informed of developments and its directors appreciate the patience and understanding of investors.