Irongate raises doubts on bonds

Kevin Podmore. Photo / Kenny Rodger

Irongate Property, the NZX-listed renamed St Laurence Property & Finance, declared a half-year after-tax loss of $13.9 million and said it might not be able to continue in business.

Irongate is one of the few remnants of the once-strong Wellington-headquartered St Laurence finance and investment real estate empire worth about $1 billion at its peak and run by Kevin Podmore.

Now, St Laurence is in receivership owing 9000 investors about $245 million.

Irongate is one of the last businesses standing in this group and has so far escaped collapse. But a $50 million repayment due in May could change that, the company indicated yesterday.

Irongate declared assets of $196 million but said it was selling properties and hoped to repay investors.

General manager Chris Minty said this depended on real estate deals. "The property market has continued, as expected, to be challenging. However, there are still buyers," he said.

The company's trustee has granted it waivers so it can continue in business. Irongate's statement spelt out its position.

"Irongate successfully repaid the secured bonds that matured on July 15 through a combination of asset sales and funding received from TEA Custodians [Bluestone Group].

"A further $50 million of bonds are due to be repaid in May 2011 and the company acknowledges that in the current environment a level of uncertainty still exists about the ability of the company to repay these bonds, dependent as it is on the company's ability to implement and execute its asset sales programme.

"In the event that the company fails to make this payment, it will be in breach of its trust deed and the trustee will then have the ability to carry out enforcement action on behalf of the secured bondholders. This could result in the company no longer being a going concern," Irongate's statement issued on NZX said.

This outcome would not be in investors' best interest, it said, because if Irongate was deemed not to be a going concern and its assets were sold, the price received for assets could well be lower than the carrying value.