Investors in Auckland's Heritage Hotel apartments are about to lose their guaranteed rental returns as the company that owns the units winds up with a projected loss of nearly $3 million.
Monday, July 5th 2004, 8:30AM
by The Landlord
Heritage Equities, which owns 32 units in the hotel, has written to bond and shareholders who five years ago bought into the company, saying the 9 per cent guaranteed rental return on apartments will expire on September 6.
Heritage Equities directors Robin Seal and Alistair Ward have written to investors saying that the company is no longer viable because of insufficient income. A financial overview sent to bondholders and shareholders shows Heritage Equities is $2,923,000 in the red.
A plea to Heritage Hotel Auckland to negotiate "a reasonable future guaranteed level of return" had been refused.
"There will be significant cashflow shortfalls once the vendor guarantee expires as the anticipated income [at best] would be in the region of half of that at present," the directors wrote. "The company is reliant on the rental stream to meet its current commitments to pay the overheads, bank principal, bank interest and bondholders' interest.
