Loan Book

  • Bill
  • 13/10/08 n/a (free)
  • a depositor
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Posted: Thu, 23/04/2009 - 17:59

I am opposed to the SoA. Anyway I think that recent developments mean that, at best, the whole thing needs to be re-worked.

But what happens to the loan book on liquidation? Going back to October we were concerned to keep the bank out of liquidation to preserve the loan book - liquidation would have meant the 'fire sale' that we all feared. I may have missed something but what happens to the loan book if the SoA is rejected. Will it be sold to the highest bidder? That will almost certainly mean an amount below book value and have a direct effect on recoveries.

Can someone enlighten me? Thanks............

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You may find this quote from the E & Y...

  • Anonymous
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  • Thu, 23/04/2009 - 20:41 on KSFUK relevant:

"A limited market testing exercise has been undertaken to test the appetite for a wholesale
disposal of the loan books. Using the bids received, a comparison was performed between
the realisations projected from the sale of the loan books and the projected realisations
through a managed run-off, allowing for costs. This indicated that a higher return for creditors
would be achieved through a managed run-off strategy."

They appear to be allowing for their loan book to be maintained in-house.

Thanks Lancara

  • Bill
  • 13/10/08 n/a (free)
  • a depositor
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  • Thu, 23/04/2009 - 20:58

Thanks. This is helpful. However, KSF UK are in Administration - apparently not an option open to KSF IoM - for us its either Liquidation or a hybrid SoA. Hence Lancara's point here suggest that the loan book should be run down - but can that be done in liquidation? The very definition of liquidation is to reduce all assets to cash values - isn't it?

So this still troubles me.....

Don't be troubled. If KSFIOM

  • frog
  • 10/10/08 13/09/09
  • a depositor
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  • Thu, 23/04/2009 - 23:08

Don't be troubled. If KSFIOM goes into liquidation, the loanbook will still be run down by the administrators unless the liquidator gets a better offer for the book (taking into account the NPV of the book etc.). This means that the payout will take up to 6 years, with the curve being a bell curve (the majority returned by year 3)