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Podmore says Irongate refinancing will result in $11m debt reduction

Tuesday 6th July 2010

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Irongate Property’s $45 million funding line from Bluestone Group will result in a $10 million-to-$11 million reduction in net debt for the property manager, says executive chairman Kevin Podmore.

Irongate has about $30 million of bonds maturing on July 15 and will use the funds to make the repayment. The balance will be used to refinance some of the company’s existing bank debt, Podmore said. Terms of the arrangement with investors led by Bluestone, including the interest rate, are confidential, he said.

“We think it is reasonable given the circumstances,” Podmore told BusinessWire.

“We’re looking to work with them on a longer-term basis and with other facilities. There’s a willingness to sit down” for further talks.

The unprofitable property manager has until tomorrow to file its overdue annual report of risk suspension of its securities from the NZX. Podmore said Irongate is aiming to meet the deadline.

Irongate, one of the units of the St Laurence group that escaped receivership, reduced bank debt to $81.6 million, or 34.2% of total assets, as at March 31, from $144.6 million, or 38.8% a year earlier. It also has $80 million in total of bonds maturing in the next 12 months.

The company has been focussed on debt reduction, realising $91.2 million from property sales in the latest year, slimming down total assets to $240 million from $372.6 million a year earlier.

Australia’s Bluestone is owned by institutional investors including Crescent Capital Partners and Barclays Bank Plc, according to its website.Irongate last week revised its loss for the 12 months ended March 31 to $54.5 million from $50.5 million after advice from its auditors over its exit from National Property Trust. It sold units in the trust to repay debt.

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