Irongate Property, 34% owned by St Laurence, asks trustee to call in receivers

Irongate Property, 34% owned by St Laurence, asks trustee to call in receivers

In what may be bad news for the 9,000 debenture holders in failed property lender St Laurence, its 34% owned Irongate Property has asked trustee Perpetual Trust to appoint receivers blaming a "moribund commercial property market."

Irongate, formerly St Laurence Property & Finance, is managed by St Laurence Funds Management and chaired by Kevin Podmore. It has been in breach of two Trust Deed ratios and faced repaying NZ$45 million worth of retail bonds, paying 9.25% per annum, on May 15 to 1,545 investors. 

St Laurence also owns Irongate's management contracts.

An insolvent St Laurence was tipped into receivership by its trustee, also Perpetual Trust, in April last year owing NZ$245 million to about 9,000 investors. Receiver Barry Jordan of Deloitte told interest.co.nz in December that the prospect of St Laurence's investors' getting back the promised up to one third of the money they're owed depended on the fate of Irongate. See more here.

Perpetual says it has appointed Jordan and David Vance - St Laurence's receivers - as Irongate's receivers too. 

“We have spent considerable time reviewing all possible avenues to assist Irongate in meeting this payment of NZ$45 million, but regrettably, due to a combination of factors including a weak property market, and strict time constraints following on from the July 2010 (NZ$30 million bond) payment, Irongate has been unable to release sufficient cash from its assets," said Matthew Lancaster, Perpetual's head of corporate trust.

Read Irongate's announcement below:

Further to the announcements made to the market on 13 December 2010 and 18 February 2011, Irongate Property Limited (Irongate) has been progressing asset sales and endeavouring to raise further capital in order to remedy the continuing breach of the two Trust Deed ratios and enable it to repay its listed bonds, in full, on their maturity date (being 15 May 2011).

Irongate’s manager, St Laurence Funds Management Limited, has advised the Irongate Board that it has been unable to obtain raise sufficient capital, or sell sufficient assets, to enable it to: - remedy the continuing breach of the two Trust Deed ratios; and - pay to bondholders the amounts required to be paid to them on the maturity of their bonds.

Accordingly, Irongate Property Limited has requested Perpetual Trust Limited to appoint a receiver in respect of the whole of its undertaking and assets.

Chairman of Irongate, Mr Kevin Podmore said “It’s extremely disappointing that the Manager’s attempts to raise new equity have been unsuccessful. The moribund commercial property market has not been helpful. The Manager has however been able to put in place sale contracts which should result in a significant de-gearing of the balance sheet and repayment of much of its senior debt, placing bondholders and shareholders in a better position."

And see Perpetual's statement below:

Irongate Property Limited has been placed into receivership by Perpetual Trust, the corporate trustee for Irongate and St Laurence Limited (in receivership). Irongate Property Limited has 1545 investors with $45 million of bonds.

“We have acted at the request of the directors, Kevin Podmore and Andrew Walker”, said Matthew Lancaster, Head of Corporate Trust at Perpetual.

“We have been working very closely with Irongate over the past 12 months as it attempted to work its way through difficult market conditions.

“While Irongate fully repaid $30 million of bonds in July 2010, the Directors have been unable to realise sufficient assets at good value in order to make a repayment of $45 million of bonds due on 15 May, this year.

“We have spent considerable time reviewing all possible avenues to assist Irongate in meeting this payment of $45 million, but regrettably, due to a combination of factors including a weak property market, and strict time constraints following on from the July 2010 payment, Irongate has been unable to release sufficient cash from its assets.

“Receivership is the appropriate course of action. It ensures that a person independent of the current management and directors will oversee the orderly realisation of the Irongate assets on behalf of the investors in Irongate property bonds,” said Matthew Lancaster.

The receivers are David Vance and Barry Jordan of Deloitte, who are also the receivers for St Laurence Limited. The appointment is to Irongate Property Limited and 11 of its charging subsidiaries. The receivers will take control of Irongate and its assets from Tuesday, May 3, and will report to investors and the Trustee within 6 to 8 weeks.

(Update  adds statement, comments from trustee Perpetual).

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