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The Auckland apartment developer whose financier is about to stage the country's largest apartment sale says she owes $14 million on the block.
Lily Zhong, who developed Winsun Heights on Vincent St, said she borrowed $9.6 million in principal from Hanover Finance but interest on the loan and fees had meant the total amount to be repaid had spiralled to $14 million.
She has complained about Hanover's fees, saying she is paying 22 per cent interest and $15,800 a month in extra fees.
But Hanover says it wants its money back. The developer had been loaned money in good faith and the term of the loan was up, it said.
Zhong said the high-rise apartment development had been difficult, with many issues over the final sign-off, titles and sales.
"We had some major difficulties in this development with delays in issuing code compliance certificates for three months," she said.
Other issues surrounding incorrect titles and problems with buyers just compounded the problems, she said.
Her company, Winsun Developments, is now in receivership and liquidation, although how much it owes will not be clear until an initial report due out tomorrow.
She had tried to sell units in the block in a last-ditch attempt to repay Hanover but had been unsuccessful.
"We tried many attempts to sell until we realised that unless we sold at a loss, it was very hard to move the stock," she said.
Hanover decided this month on a mortgagee sale, engaging Barfoot and Thompson agents to call for tenders on 92 of the 153 units in the block.
But Zhong said yesterday she still thought this move was wrong, saying Hanover could get a better result by agreeing to her recommendations of selling the units separately.
Zhong has wanted Ray White to sell the units and agents there say they have contracts worth about $11 million for the apartments.
