New investments halted by St Kilda Finance

Small Dunedin-based finance company St Kilda Finance has stopped taking new investments after reinvestment levels fell from 65 percent to 15 percent.

Chairman John Farry said the company had sufficient capital to pay debentures "as they come through," the Otago Daily Times reported today.

The company "was not at present" considering placing a moratorium on payments and with $5 million in paid-up shareholder capital, debenture payments could be met, Mr Farry said.

At August 1, the company owed $9.7 million to 553 investors, while there were 24 loans worth a combined $10.3 million.

Apart from poor reinvestment rates, a deterioration in the property development area meant St Kilda had written off loans worth $399,833 and made provision for $780,889 of doubtful debts.