Ballantyne bond rescue looking shaky
The chances of bondholders in the Ballantyne Property syndicate getting all their $8 million back have diminished in the month since they voted for a rescue package.rs
Thursday, May 18th 2000, 12:00AM
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Pacific Properties Ltd, known as the Ballantyne bond, raised $8 million from the public in 1998 to fund the development of an 18-hole golf course and 150 unit residential development near Katikati, west of Tauranga.
The initial interest payments were made to bondholders, however the developers defaulted on the final payment in the middle of last year when they failed to secure sufficient pre-sales of sections at the development.
Then in March a proposal was put to bondholders where the development would be sold to another company, and partial repayment of the bonds would be made in three tranches.
The first of $250,000 was due to be paid after bondholders had voted in favour of the package at a special meeting on April 19.
However, the trustee, Tower Trust says a month has passed and the $250,000 has still not been paid despite repeated requests.
The second payment of $7.25 million is scheduled to be made 90 days after the meeting on July 19, and there is provision for a third and final payment of $500,000 to be made a year after the meeting.
This final payment, which would mean bondholders got all their capital back, has always been conditional on the new developer meeting certain performance hurdles.
Many people involved with the bond have felt it was unlikely that final payment would ever be made.
However, they weren't expecting that the first payment of $250,000 would fail to materialise after the meeting.
Tower Trust says it is reviewing its position on a day by day basis.
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