Uncertainty over Irongate debt

Kevin Podmore. Photo / Brett Phibbs

Irongate Property, the NZDX-listed St Laurence real estate business, might not be able to repay $30 million of bonds due this month.

Kevin Podmore, Irongate's chairman, spelt out the trouble in the annual report. "The key value issue facing the company is its ability to meet the bond repayments due in July ($30 million) and in May 2011 ($50 million).

"Although the degree of difficulty has increased as a result of the receivership of St Laurence Ltd, the manager is working on multiple options to meet the bond commitments. We currently expect to meet the repayments through the various asset sale and financing initiatives we have in train. However, I [acknowledge] a level of uncertainty still exists about the company's ability to repay the bonds in July," Podmore said.

If Irongate failed to repay the money this month, the trustee could take action on behalf of the secured bondholders, he said.

Irongate has sold $120 million in property in the past year and has reduced its bank debt to $81.6 million, Podmore said.

The annual report declared assets of $236.3 million as at March this year.

Irongate's real estate portfolio includes the prominent nine-level Auckland office building at 139 Quay St at the foot of Princes Wharf, Palmerston North's Vero Building, 104 Customs St West in Auckland and 55 Molesworth St in Wellington.

Podmore said it had been a wise move to re-brand Irongate and drop the St Laurence name "especially in light of St Laurence Ltd being placed in receivership in April.

"St Laurence Ltd is the ultimate shareholder of our manager and largest shareholder, St Laurence Funds Management Ltd, which is not in receivership," Podmore wrote.