Southside bids for cheap Irongate bonds

Auckland-based property developer Southside Group has launched a bid for 10 per cent of the bonds in Irongate Property at half the value they were trading at before Irongate went into receivership on May 4.

Southside, which develops commercial, industrial, multi-storey apartment and residential subdivisions in the greater Auckland area, said in a letter to Irongate bondholders that it was looking to gain a strategic stake of 10 per cent to enable "meaningful discussions with the Irongate receiver regarding the disposition of assets".

The company is offering to buy up to 10 per cent of NZDX-listed Irongate bonds at 30c in the dollar.

"The Southside offer also provides the opportunity for small bond holders, many of whom have watched the sad outcome of a number of recent property-related receiverships, to cash up their investment quickly and move on," director Chris Jones said.

Irongate, which is 34 per cent-owned by finance company St Laurence, was put in receivership by its trustee, Perpetual Trust, shortly before $45 million of its NZDX listed bonds matured and were due for repayment on May 15.

One of Irongate's receivers, Deloitte partner David Vance, said a receivers' report is due out within the next fortnight, which should give an idea of the bonds' value. An asset was sold just after receivers were appointed and two major properties are for sale by tender concluding at the end of July.

"Without giving any advice whatsoever, the comment from the receivers would be that if they were in the position of being a bondholder, they would not accept the Southside group offer," Vance said.