Wellington, Sept 9 NZPA - The slowing property market is expected to reduce even further the amount secured debenture investors in Lombard Finance and Investments Ltd (LF&I) will recover.

In a new letter to investors, receivers John Fisk and John Waller of PricewaterhouseCoopers said they had revised their estimate of recoveries to the 3900 secured debenture investors, owed $111 million.

The estimate was now for a range of between 19 percent and 40 percent of the original investment, down from a range of 21 percent to 44 percent estimated in May.

Recoveries from the property loan book -- which consists of 27 loans and has a book value of $136.7m -- were now estimated in the range of $26.8m to $49.5m, down from a range of $29.4m to $53.7m estimated in May.

About 56 percent of the property loan book covered bare land comprising coastal subdivisions or future development sites, the receivers said.

"Given the slowing property market, we consider that there is significant uncertainty regarding the length of time required to achieve an orderly sell-down of these sites, resulting in increased holding costs and lower realisations."

The timing of any investor payout remained uncertain due to the nature and difficulty of realising the company's assets.

It would be prudent for investors to assume they would not receive any distributions from the receiverships within the next six months, the receivers said.

Gross recoveries of $10.7m from the property loan book had been realised so far, of which $1.5m had gone to LF&I, with the rest being paid to prior ranking security holders and to cover direct sale costs.

An investigation was continuing into the activities of LF&I and third parties before the receivership.

NZPA WGT mjd gt