KEY POINTS:
New Zealand finance company St Laurence is closing in on Australian cricket legend Craig McDermott's embattled property developments in Queensland.
The Australian newspaper today reported the Bridgecorp Finance receivers said they would be forced to place the former Aussie fast bowler's development companies in receivership if debts -- which have ballooned to A$22 million ($26 million) from A$18m in July-- were not paid "on a timely basis".
St Laurence managing director Kevin Podmore told NZPA today the group's New Zealand lending division, St Laurence Ltd, was owed about $7m in overdue loans by Mr McDermott's Maxen Developments.
Mr Podmore was confident St Laurence, which has about $280m in investor funds, would recover its debts which are secured by first and second mortgages over Maxen's 12 Mile Beach and Fraser Waters property developments in Queensland's Hervey Bay.
He said St Laurence had recently issued a prospectus in New Zealand and that did not include any provisions for a loss on Maxen, such was the company's confidence on repayment.
In July, Mr McDermott's Maxen Developers was disclosed as the mystery developer that owed the bulk of the funds lent by the Australian arm of Bridgecorp, Bridgecorp Finance.
Maxen's loans, accruing a fierce 30 per cent interest rate, compounding monthly, have not been repaid. They hold the key to Bridgecorp's 1000 Australian investors recovering their funds.
Mr McDermott said in July reports that Maxen had "long outstanding debts" to Bridgecorp were "profoundly false and malicious". He confirmed that Maxen had loans from Bridgecorp.
Mr Podmore said Mr McDermott had been a client of St Laurence's for five years. He said Mr McDermott had borrowed money from many sources for his developments.
St Laurence had held off appointing administrators on Maxen but had pushed for properties to be sold, although Mr Podmore said: "It's fair to say we are not happy with the rate of sales".
In a separate development, Mr Podmore said St Laurence was considering winding up its A$30 million ($35 million) debenture-backed Australian property lending arm that had seen five directors resign in the past 12 months.
He said the Australian-based St Laurence Capital Assured Fund, which lent money as first mortgages over property developments, had lost money and would be wound up soon.
He said St Laurence had attempted to get credibility in the Australian market place but had failed to get critical mass.
Bridgecorp's Australian receivers, Ferrier Hodgson, said they had inspected Maxen's property developments but would not disclose the chance of recovering the loans due to "commercial sensitivity".
The receivers said they were in talks with Mr McDermott about the debts which were all overdue.
"Should Mr McDermott or his group be unable or unwilling to provide us with an acceptable proposal it will be necessary for us to consider initiating other recovery procedures," the receivers' report said.
Last month, Brisbane Broncos chairman Barry Maranta and Gold Coast property developer Mike Gore Jr said there were negotiating a rescue takeover of Mr McDermott's Hervey Bay property developments. However, The Australian said today that deal was looking increasingly shaky.
Mr McDermott, famous for his vicious bumpers, has had a few bowled his way this year. It was reported last month his ex-wife was suing him for unpaid child support and, in August, it was disclosed the Australian Tax Office was pursuing him over an unpaid tax bill.
The Australian said it understood Mr McDermott's mansion at Queensland's Runaway Bay, bought for A$2.6 million in 2004 in the name of his wife, was recently placed on the market.
Mr Podmore told NZPA the Australian arm was not important to St Laurence, which manages around $1.2 billion of assets.
St Laurence was in good shape, having positioned itself two years ago for harder times. It had moved into funds management and was no longer totally reliant on lending.
However, in August the flow of funds into St Laurence had turned negative for the first time, he said.
He believes hard times will continue for finance firms, possibly getting worse before they get better.
He said St Laurence had $55m cash in the bank at the end of August and $45m of debenture commitments over the next six months. As well, $105m of loans were due for repayment over that period.
"Liquidity is not a problem for us. We are lending, but obviously not as much as we were."
- NZPA
