St Laurence fund breaches trust deed

An investment company linked to property finance group St Laurence has run into trouble.

The St Laurence Property Development Fund, which is managed by St Laurence, has breached its trust deed after failing to make an interest payment to bond investors in June.

Around $20 million was raised by the company in 2006 in a bond offering to pay 15 per cent interest a year over the next five years.

Perpetual Trustee chief executive Louise Edwards confirmed the company was in default on its bond payments and had advised investors.

Edwards said the company had submitted a repayment plan that would enable investors to be paid back by the end of 2010. She was reviewing the plan and expected to make a recommendation in the next week on whether it would be acceptable.

She linked the default to the tough property market.

According to its prospectus, the company invested in developments sourced and managed by St Laurence.

The biggest shareholder is Auguste Holdings, the investment company of St Laurence chief Kevin Podmore and Wellington valuer Mike O'Sullivan. Shares are also owned by the investment custodial services arm of the ASB Bank and broker First NZ Capital.

Podmore's business St Laurence froze repayments to its 9000 debenture investors halfway through last year. The investors, owed $250 million, have agreed to a 13-year repayment plan.