Ballantyne bondholders get 30c in the dollar

The final outcome of the Ballantyne Property Bond isn't looking too flash for investors.

Trustee Tower Trust has written to bondholders telling them that they can soon look forward to an interim payment of 30c for each dollar invested.

Originally promoter UPC raised $8 million through a bond issue to fund the first stage of the Ballantyne Golf and Retirement Resort in Katikati. The bonds were originally due to be repaid on September 30, 1999.

That never happened because insufficient residential sections were sold. Eventually the development went into receivership in June last year.

Since then various offers have been made and the receivers finally sold the development to interests associated with Rocky Cribb, a central figure in the Maori Loans Affair on the mid-1980s, for $4 million plus gst.

This sale has attracted much criticism as Money Managers boss Doug Somers-Edgar and Richmond Paynter had put together a so-called rescue package.

Recently, some parties have discussed taking legal action against the sale. However, this appears to have died down.

Tower Trust general manager Glenn Clark defends the sale saying it was the best option for bondholders.

The sale comprises of two parts. First up is the golf course and 80 uncompleted residential sections. Secondly there are 25 uncompleted residential sections which are subject to caveats.

The receivers have been paid for the first part and are holding the money in an interest bearing account.

However, payment of the second part will only be made when the caveats are removed.

Clark says that this process requires litigation.

He has reassured bondholders that "the total sale price will not be less than $4 million plus gst."

It is unknown what the final recovery will be. "(That) will depend upon the amount recovered from the sale of Part 2 assets and on the final wind up expenses including the completion of the receivership," Clark says.

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