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Companies In Billion Dollar Development Put Into Receivership

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 26 NZPA - Two high-flying companies associated with a billion-dollar resort development in Queenstown have been put into receivership.

They are Melview (Kawarau Falls Station) Investments Ltd and Melview (Kawarau Falls Station) Development Ltd.

Auckland-based Nigel Anthony McKenna is a director of both companies. His company Melview Developments also developed the Beaumont Quarter and Lighter Quay projects at Auckland.

Mr McKenna is reported to have pre-sold large parcels of the Queenstown project to two UK-based buyers, one a private investor who is buying a chunk for about $100m, and another larger chunk to Blue Sky Capital for more than $300m.

Brendon Gibson and Grant Graham of KordaMentha have been appointed as receivers. Mr Gibson said their assessment would take a couple of weeks.

"This is a complex development being built in multiple stages," he said.

"Our immediate task will be to understand the construction costs and associated revenue streams for the project.

"The current intention is that construction work will continue to be funded in the interim while all the options are assessed."

The 6.4ha site at Kawarau Falls Station, the only north-facing high-density residential site in Queenstown, was intended to have 1100 units and 13 buildings, boulevard-style streets, restaurants and parks, when completed in 2011.

The companies in receivership were involved with the first stage -- construction of two hotels.

The three-stage complex was expected to be worth more than $1 billion, and to become the single largest employer in Queenstown, with about 880 people working on and off the site.

The NZ Superannuation Fund was at the weekend reported by the Sunday Star Times to be in talks to underwrite the property development, but neither the Super Fund nor Mr McKenna was prepared to comment on the proposal.

The newspaper said the Super Fund was willing to underwrite the project, but the parties had not been able to agree on the terms and negotiations were continuing.

Construction of the first stage of the project, two international hotels and an extensive upmarket residential development, was financed by Bank of Scotland International (BOS), which has a first mortgage securing up to $513m, and Hanover Finance which has a second mortgage securing up to $150m. BOS is reported to have brought in the receivers.

Funding for a second stage was to be provided by Fortress Credit Corp with Hanover as second mortgagee.

NZPA

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