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Goldman-Brookfield JV may profit on ex-Serepisos property sales

Monday 28th May 2012

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A Goldman Sachs-Brookfield Asset Management joint venture stands to gain from the sale of properties once owned by Wellington developer Terry Serepisos after the JV bought a billion-dollar loan portfolio from Bank of Scotland International last year.

The Goldman-Brookfield JV is owed $35.8 million as the first secured creditor on the Farmers and Deka buildings on Wellington's Cuba Street, which have been put up for sale, and a further $57.9 million on property in Petone, according to receiver's reports on Serepisos’s Century City Holdings and Century City Ventures. The JV took over the loans worth $95.1 million on Dec. 16 last year.

The consortium reportedly spent between $450 million and $470 million on loans with a face value of $1.3 billion over 22 New Zealand properties last year, including some owned by the bankrupt Serepisos. That amounts to as much as 36.2 cents per $1 face amount of debt.

Using the top of that range, the JV would realise a profit if the Cuba St site sells for more than $13 million and the Petone property attracts bids of more than $21 million.

Receivers David Ruscoe and Richard Simpson of Grant Thornton said the Cuba St property is on the market for sale by deadline private treaty which closes on June 26.

"We are confident that all the property will be sold following this process," they said in the Century City Holdings report. "At this stage we are unable to estimate what the final sales price of this property will be."

The Petone property held by Century City Ventures will be put to market once the receivers work through "various repairs, maintenance and leasing issues" and when they "believe it is the best time in the market to obtain the optimum realisation," the report said.

Ruscoe and Simpson were appointed as receivers of the two companies on Sept. 30 last year. That came after Serepisos was bankrupted when he failed to get more time to secure funding from a Hong Kong-based merchant bank.

At the time of his bankruptcy, his portfolio of about 150 residential properties and more than six commercial buildings was valued at $232.5 million with debts totalling $204 million.

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