Strategic Finance bank debt knocks down first repayment to investors

The finance company managed to pay in full the $25 million priority debt facility to the Bank of Scotland, though "sufficient loan repayments have not occurred to enable SFL to be in a position to make the first payment to stockholders" scheduled for Jan. 7, chairman Denis Thom told investors in a letter.

Last month, he said the company needed to complete several sales before everything shut down over the Christmas holiday period to meet the payment, and that Strategic may have to increase its provisioning.  

"Not all of the conditional and unconditional sales that were required to settle to enable loans to be repaid and provide SFL with the required cash proceeds have occurred," Thom said in his letter.

"The SFL board has informed the trustee that it considers it likely that a ‘review event' under the moratorium arrangements will occur on 7 January 2010 and this has already resulted in the commencement of constructive dialogue between the company and the trustee."