tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, March 29th, 10:40AM

News

rss
Latest Headlines

Money Managers boss to the rescue

Money Managers managing director Doug Somers-Edgar has stepped in to rescue the Ballantyne bondholders.

Wednesday, November 29th 2000, 10:59PM

by Philip Macalister

Money Managers managing director Doug Somers-Edgar is part of a group fronting up with $1 million to help rescue the Ballantyne property bond issue his company promoted.

Tower Trust put the Ballantyne group of companies, which were developing a golf course and residential development near Katikati in the Bay of Plenty, into receivership in June because they had defaulted on payments to investors.

Currently the 600 bondholders in this development are owed their capital of $8 million plus interest. They got their last interest payment in September 1999 and are still awaiting the return of their capital and the final interest payments.

Tower Trust says three rescue packages have been put up for Ballantyne. The Somers-Edgar one (known as the Paynter Proposal), is being done in conjunction with Christchurch-based Richmond Paynter and trumps the other two proposals.

One which is still on the table is a $3.65 million cash offer from Mr Gray and Mr Schofield. The other, known as the Charta proposal, has now been withdrawn.

Tower says the Paynter proposal plans to fund the development and marketing of the Ballantyne resort with a $1 million unsecured interest free loan and a $1.5 million mortgage arranged through a bank or other financial institution.

Under the base case scenario bondholders are projected to receive $6.28 million, or the equivalent of 78.5c in the dollar, of their capital originally invested.

This return could be higher if the golf course is sold for more than $750,000 or additional residential sites are developed along the fairway.

Tower says the unconditional cash offer equates to a return of 42.65 cents in the dollar.

Somers-Edgar has put up the proposal as a business venture but also as a benevolent gesture to clients.

The major downsides to the Paynter proposal are that there are no guarantees provided and bondholders will rank behind the financiers which provide the $1.5 million, although bondholders are effectively providing the majority of the finance for development.

Completion of the development and the sale of the golf course is being done at the bondholders' risk.

The repayment schedule has bond holders well down the list. First up are legal fees and real estate costs. Next 10% of gross sale proceeds go to the company behind the Paynter consortium. After that comes the trustee's fees, then the first and second mortgages will be repaid. At that stage 60% of proceeds will go to the company behind Paynter and 40% to bondholders until the $1.5 million mortgage is repaid.

The ratio then changes to 85:15 in favour of bondholders until the $1 million interest free loan is repaid. Anything left over is split 75:25 in favour of bondholders.

Tower Trust estimate that by the time the $1 million interest free loan is repaid bondholders will have received $5.2 million of their $8 million capital back and no interest.

It says the success of the proposal will depend on the skill of the Paynter consortium. The workout proposal has a three year time limit.

« Equitable slams Morningstar reportGet your tax questions answered online »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com