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Industry experts are nervously eyeing signs of trouble in the property development sector as Wellington-based finance company St Laurence yesterday called time out on lending, fundraising and investor repayments.
St Laurence owes about $250 million to 9000 debenture and capital note holders taking the amount of cash tied up in the 23 finance companies that have now either failed or struck serious difficulties in little more than two years to more than $2.5 billion.
Like Dominion Finance, which last week said it would seek a moratorium from investors owed $276 million, St Laurence primarily lends to property developers.
Echoing the words of Dominion Finance boss Paul Cropp, St Laurence's chairman and major shareholder Kevin Podmore said his company had liquidity problems caused by low debenture reinvestment rates on one hand and late repayments from borrowers on the other.
While St Laurence has not yet defaulted on repayments to its investors, Mr Podmore said it was probably just a matter of time and he and his company had chosen to be "proactive" by coming up with a repayment plan.
Industry experts told the Herald yesterday it was alarming that companies like St Laurence and Dominion Finance - regarded as quality, well-run outfits - were hitting the wall.
