Mascot failure likely to cost taxpayers $33 million

The government, which paid out the 2,511 investors owed $65.2 million under the terms of the deposit guarantee scheme, can expect to receive 50 cents in the dollar in the first distribution payment, according to Paul Munro and Brett Chambers of Deloitte. In their six monthly report dated Sept. 2, they had realised some $23 million from Mascot's loan book, which has a net value of $42.3 million, $36.9 million of which is tied up in property loans.

"The amount likely to be available to secured and other creditors is difficult to assess as the outcome will be dependent on the values from a small number of larger loan balances," the report said.

Still, they are unclear when the first payment will be made, and said "any subsequent distributions will be dependent on the outcome of continuing realisation efforts" and they do not expect unsecured deposit holders, unsecured creditors, redeemable preference shareholders or ordinary shareholders to receive any repayments.

Munro and Chambers said they had received expressions of interest to buy Mascot's personal loans book, which was worth $978,000 as at Sept. 2, but had decided "aggressive servicing of the loans" would result in a better cash flow than accepting a discounted sale. Still, they said they are open to selling the personal loan book when the quality of loans declines.