Allied Farmers Ltd has appointed a receiver to a company associated with the failed Five Mile Holdings development near Queenstown in a bid to chase a loan accruing $23,000 of unpaid interest each day.The Taranaki-based rural supplies and finance company
Allied Farmers Ltd has appointed a receiver to a company associated with the failed Five Mile Holdings development near Queenstown in a bid to chase a loan accruing $23,000 of unpaid interest each day.
The Taranaki-based rural supplies and finance company purchased the assets of Hanover Finance and United Finance last year in a share for debenture swap. The company's share price fell this week after it reported an interim loss and reduced the value of the acquired loan book. Its share price closed down 0.3c to 7.6c today, which is well off the 53.6c year-high in April last year.
The company said after the market closed on Friday that its Allied Farmers Investments Ltd unit has placed Property Ventures Ltd into the hands of receiver, Grant Thornton in an attempt to recover a $41.5 million loan to Five Mile Holdings Ltd, which is in receivership.
The loan, which is accruing interest at more than $23,000 a day, is guaranteed by Property Ventures Ltd.
Allied Farmers managing director Rob Alloway said that this was the first of many such actions involving borrowers who have failed to meet their obligations.
Allied Farmers holds a general security agreement over the assets of Property Ventures, which is owned by a number of investors including Christchurch property developer, David Henderson.
Property Ventures has interests in more than 30 subsidiaries, including those associated with Hotel So, and the South Of Lichfield entertainment and retail precinct in Christchurch.
"We will use all reasonable means available to us to collect outstanding principal and interest on loans which were entered into in good faith," said Mr Alloway.
"We are not going to sit back and watch borrowers skip their obligations," he said.
The Five Mile Development exposure has been provided for in Allied's accounts and 23 hectares of land at the development has been put in a special purpose vehicle called 5M No2 Ltd, which Allied owns.
Separately, Grant Thornton was this week appointed receiver to a company called Peninsula Road, which owns the land that stage two and three of the large Kawarau Falls Station development in Queenstown will be built on.
Peninsula Road is owned by Auckland property developer Nigel McKenna. The receiver was appointed by Fortess Credit Corp but Allied Farmers is a second mortgage holder and Allied said it may take some secondary action on that receivership.
Allied's exposure to Kawarau Falls amounted to $88 million of principal, of which 75 percent was associated with the later stages, Mr Alloway said.
