The disclosure is in Du Val’s information memorandum (IM), prepared as an offer of shares for fund investors in December.
The offer is structured to try to force investors, who have had interest payments frozen since October 2022, to swap their outstanding loans to the company to shares, effectively moving debt into equity.
The Auckland property developer and non-deposit taker is offering 200 million $2 shares to convert lenders’ debt from investors in its mortgage and build-to-rent (BTR) funds to equity in a restructured Du Val Property Group.
The 83 investors in the mortgage fund had each put in at least $250,000, with several having invested much of their savings into the funds as a supposed safe haven, yielding a quarterly cash distribution at an annual interest rate of 10 per cent.
