Debenture-holders in Strategic Finance Limited should be wary of an offer by Stock & Share Trading Company Pty Limited to buy their debentures for 5c in the dollar. Stock & Share Trading Company, which is based in Australia, had previously offered investors 20c in the dollar.
There was also an earlier unsolicited offer to Strategic Finance debenture holders by Marchmont Securities Trust, which the Commission issued a warning about in January.
The Securities Commission reminds investors to be cautious of any unsolicited offer to purchase their investments, especially where the offer is well below face value.
The Securities Commission urges investors to seek professional advice before making any decision to accept the offer.
When a finance company is in receivership it is very difficult to accurately assess the value of the company's debentures. The debentures are not trading on any organised market, so there is no market price against which investors can assess the offer.
Under securities legislation it is not illegal to offer to buy securities below their face value. Any offer to buy securities from investors must not be misleading or deceptive.