"Thank you for your continued patience while the mortgagee, PearlFisher, works through the conditional aspects involved in the mortgagee sale of the property held at 156 Central Park Dr, Henderson," Maat Group's Jodi Tuffin wrote to shareholders yesterday.
The Herald reported last month on the heartache some shareholders were feeling, worrying about how to eat, suffering nightmares and insomnia and unable to tell family members about their investment in the ill-fated scheme.
Maat's communication yesterday was a further update on the situation, she said.
"Pearlfisher informs us that the construction of the building and landscaping is due to be completed in the next week or so. This means that the certificates of code of compliance will begin to be issued. This process, as outlined by the council, is expected to take around eight weeks, which should conclude at the end of July/beginning of August. This is not a set date but an indicative one," Tuffin said.
Investors were asking questions so the letter aimed to give answers.
"The investment vehicle Central Park Property Investment Limited was created to help fund the development of the building and the purchase of the land. The management of the construction of the build was the responsibility of Magsons Investments who together with CPPIL owned the land and buildings via the joint venture company, Everest Central Investments, who was the landlord," Tuffin said.
Due to cost overruns and delays, Magsons began to experience funding problems with the development.
Mid last year Magsons tried to raise money to complete the building and looked to sell its shares in Everest.
Central Park had rights to acquire Magson's shares and exercised those rights, Maat's letter said.
"The funds were applied towards the construction of the building. Despite this, as you are aware, the tenant failed to achieve the required sales and could not pay the rent to Everest, and was ultimately placed in receivership.
"Once this occurred, Maat tried to secure further tenants and investors to provide Central Park investors with an opportunity to retain the land and buildings. Unfortunately, despite many attempts, no further investment was secured and the mortgagee exercised its rights to sell the land and buildings," Jodi Tuffin said.
Maat had believed in both the investment and the tenant.
"Like many of you, the concept of a big-box retailer was attractive and in our view, achievable to create an investment that would bring a start-up business to the market," she said.
"While the sale remains under a conditional contract, Pearlfisher will continue to charge penalty interest. This will be paid from the balance of funds from the sale, once completed," she said.
Pearlfisher is charging 21 per cent interest.
"We are expecting a return to investors but it will be less than the amounts invested. We are working hard to maximise the return."
Because the sale is in the mortgagee's control, Maat said it was unable to effect a speedy completion, a halt to penalty interest, or a fast turnaround of code compliance.
"Therefore we are continually in communication with the project managers, Rubix, and Pearlfisher to expedite this process in any way we can. We understand that this has caused stress and uncertainty for investors and are deeply sympathetic. As we progress through these final stages we will keep you informed as these are completed," Maat said.
Neil Tuffin of Maat and a relative of Jodi Tuffin said today yesterday's letter was an update to investors to respond to a number of queries raised.
"We want to keep investors up to date as matters progress as much as we can as we understand the stress this has caused and are deeply sympathetic to our investors' concerns. The key matter, of course, is the expected return to investors," Tuffin told the Herald.
Since the mortgagee, Pearlfisher, exercised its rights to sell the property Maat was largely reliant on them for information.
"We have previously updated investors that Pearlfisher elected to complete the building and obtain code compliance for the building as part of the sales process. The build costs, together with the continuing default interest charged will be deducted from the sales proceeds before repaying our investors," Tuffin said.
Unfortunately, Maat does not have any control or visibility on build costs or Pearlfisher's expenses, he said.
"So, while we are confident that there will be a return to investors from the sale proceeds, we are not yet aware of the final amounts nor the timing. The process is now largely out of our hands. We are deeply sympathetic to our investors and we worked hard for a more favourable outcome. We will continue to keep investors informed as much as we can," Tuffin said.
