Pioneer Credit Ltd (ASX: PNC) shares remain suspended due to ongoing woes, but it has provided an update this morning.
Pioneer Credit is a debt collecting business that also provides other financial services with over 160,000 customers across Australia and New Zealand. Pioneer Credit Solutions acquires and manages retail debt portfolios, Pioneer has headquarters in Perth, it also has offices in Sydney, Melbourne, Brisbane and Manila.
Pioneer Credit’s Latest Update
Pioneer Credit is currently in a trading halt, which likely won’t finish until 30 September 2019.
There has been an ongoing issue with the fact that Pioneer Credit has in the past been accounting for its purchased debt portfolios (PDP) differently to many other in the industry.
For the FY19 result it is developing its financial model to calculate the value of its PDP under amortised cost, but it hasn’t yet determined an appropriate value and its auditors haven’t been able to complete the audit. Therefore, the company still can’t release its FY19 result.
However, as a result of this change, there is likely to be a “material” difference in the company’s net profit after tax and measurement of its assets at amortised cost.
What Happened Today
Pioneer Credit has entered into a ‘Standstill Agreement’ agreement with its senior financiers of Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC).
The SA provides, among other things, that subject to compliance with its terms, the Senior Financiers will not take any action in relation to the existing defaults for a standstill period to 14 October 2019, unless extended.
Pioneer Credit said that the parties are in continued discussions about the standstill period and the time needed to implement the preferred solutions of Pioneer Credit, but no principal repayments or penalty interest are required to be paid during the current SA.
Azure has been appointed to assess the proposals received about Pioneer’s assets, including takeover proposals and the provision of alternative funding, if required which is “proceeding well”.
The company said it continues to operate, including the continued investment from its forward flow debt portfolio programme from free cashflow.
It seems there’s no quick answer, so it may be better to think about the growth shares in the free report below instead.
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