Chow Bros-backed Inno Capital says Stonewood Homes will be back building asap

Wednesday 9th March 2016

Inno Capital, the investment vehicle part-owned by Wellington property developers the Chow brothers, wants its newly-bought Stonewood Homes to get on to a stable footing and back to building houses as soon as possible.

The investment firm bought the national franchise rights and Christchurch franchisee for Stonewood for an undisclosed sum just two weeks after receivers were appointed to the country's third biggest home builder.

Inno's immediate focus is to stabilise the business, and get staff, franchisees and customers on board so it can get back to building houses, director Clint Webber told BusinessDesk.

"The reason Stonewood is struggling was that it had a cashflow problem - it's a legacy issue," Webber said. "If you can strip out that issue with the injection of new capital and very good governance and new management, and give people a new lease of life where they don't have to spend most of their time dealing with problems and can focus on building houses, it's a whole new proposition."

Christchurch-based Stonewood appointed receivers last month owing creditors about $15 million, raising fears about what the firm's failure would do to the Canterbury rebuild.

Receiver Grant Graham of KordaMentha said he was "delighted" to be able to sell the business within a fortnight and save 44 jobs.

"To get an offer like this that preserves the jobs, keeps the business going in Christchurch, quite apart from having the franchise business - we're pretty happy with it," Graham said.

Stonewood had been running a recapitalisation process prior to the receivers' appointment, which Graham said gave them a head-start when trying to sell the business.

Inno's Webber said they had looked at Stonewood six months ago, but couldn't find a deal that worked for both sides. When receivers were appointed, Webber said it was an opportunity to "save a company that's fundamentally fantastic and make it very very good again."

Inno is better known as a non-bank lender, and has been involved in a number of property developments, but also seeks out both equity and debt investment opportunities. The firm is a separate entity from the Chow brothers NZAX-listed Chow Group.

BusinessDesk.co.nz

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