Insured Group has abandoned its capital-raising after being blocked by the Australian Securities and Investments Commission (ASIC) for the second time.

The company has also admitted its finances are in a perilous state, with St George Bank wanting a $3 million loan repaid by September 30.

MD Wayne Miller says Insured Group is still in discussion with the bank, its largest creditor.

“This amount reflects a reduction of $1.694 million from the total due at December 31 2011,” he said in a statement to the New Zealand Stock Exchange (NZX).

“The company expects to pay a portion of the $3 million to St George Bank before September 30.

“At present, no terms exist to extend the facility beyond that date but extensions have been provided in the past as part of the company’s continued reduction in the facility amount.”

ASIC was concerned the Insured Group prospectus did not contain sufficient clear and concise information on the position and prospects of the company.

“The company has decided the nature of certain prospective transactions were too uncertain to enable the company to succinctly address the matters raised,” Mr Miller said.

Having abandoned the capital-raising, Insured Group will stay listed on the NZX and defer its application for a listing on the Australian Securities Exchange.

Meanwhile, a takeover deal for a loyalty scheme company in which Insured Group owns a 16.67% stake has fallen through.

The takeover of Priority One Network Group by entertainment company Two Way was called off after problems with due diligence.

Two Way proposed to give Priority One shareholders 7.5 shares for every one in the takeover target.

St George Bank has a lien on Insured Group’s Priority One stake as security for its loan.

Insured Group and Priority One also have a joint venture called Priority One Insured, which plans to sell insurance to the loyalty customers.