Where Albany money went

Kevin Podmore. Photo / Supplied

Kevin Podmore, chairman of the failed Albany City Property Investments, explains the project's losses, estimated by the liquidator to be $76.2 million and in the 2009 accounts to be $96 million.

How were the $96m losses (March, 2009 accounts of ACPI) incurred? Can you outline where the money has gone?

The $96 million of losses is primarily made up of an $82.1 million loss on fair value adjustment.

The liquidator's report gives losses of ACPI of $76.2 million: $23.5 million to bondholders and the rest to Albany City Development Ltd - how/why has ACDC lost this money? Where did the Albany City Development money go, given this is an associated party of ACPI?

ACDC appears to have lost money as a consequence of buying Westpac's loans. Refer to note 10 of liquidators report. ["The company's debt to secured creditor Westpac Bank was assigned to ACPI on the issue of the order of possession in favour of Albany City Developments Ltd. The liquidators understand Albany City are in the process of discharging the debt registered against the company."]

What's your view of not repaying bondholders the $23.5 million capital? How do you feel?

I am saddened by the loss to all those who were involved in ACPI.

You've said the main reason for failure of ACPI was the nature of the leasehold land deal - why, being a property expert, did you entertain such a scheme when you surely knew the dangers?

My comments were made with the benefit of hindsight. At the time of establishing ACPI the project was considered viable, notwithstanding risks associated with leasehold land.

I note Westpac dropped litigation, what can you tell me about this?

As mentioned, ACDC has purchased Westpac's loan.

Writing about fringe developments with problems - Albany, Kensington Park, Flat Bush - do you see links? What's your view now of highly-geared speculation on land on the fringes?

Such projects are best funded with mainly equity rather than debt.

Where did the money go?

Into acquiring three leasehold interests; obtaining resource consents for a hotel, retirement village and office buildings, sub-division of lots into residential lots for on-sale and completion of an office building; and paying bank interest.