Bridgecorp New Zealand free of Westpoint
Finance company Bridgecorp Holdings's problems relating to a A$450 million ($512 million) property company collapse in Australia shouldn't result in a trading loss for its Australian arm and won't affect its New Zealand operations at all, says marketing manager Joanne Tait.
Monday, March 13th 2006, 6:00AM
Bridgecorp and fellow New Zealand finance company Hanover Group jointly provided second mortgage funding to a Westpoint retail and apartment development in Melbourne.
She says the Westpoint loan is financed by Bridgecorp Australia and has no direct effect on the operation of the Bridgecorp New Zealand business, which has not lent any money, nor has any exposure, to Westpoint.
"The Westpoint situation does not jeopardise any investments made by New Zealand investors in its New Zealand investment products," she says.
Tait says Bridgecorp and Hanover's loans rank behind a $A61 million first mortgage but that they have appointed a receiver to manage the 305 apartment project through to completion, which is expected by the middle of this year.
Bridgecorp's total exposure is $A26 million, she says. That's more than the A$20 million limit to a single borrower outlined in the prospectus, but is allowed with the board's approval, she says.
Bridgecorp Australia's total assets at June last year were about A$160 million and shareholders' equity was more than A$17 million, she says.
The Melbourne complex has an estimated value of A$150 million on completion.
Unconditional pre sales already total A$103 million, she says.
ASIC criticised Bridgecorp's prospectus for failing to disclose its full exposure to Westpoint. Tait says Bridgecorp is working closely with ASIC "to ensure that the prospectus is presented in a clear, concise and effective way."
She says the company expects to recover its loan principal but may not receive all the interest and fee income to which it is entitled.
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