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Irongate receiver urges bond holders to wait before accepting Southside offer

Tuesday 21st June 2011

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(BusinessDesk) – The receiver of Irongate Property Trust says the failed property investor’s bond holders should wait for their report before deciding whether to accept a discounted offer for the securities from development firm Southside Group.

Irongate was put into receivership by Perpetual Trust on May 3 after running out of time to find new capital to meet repay $50 million of bonds that matured on May 15. The 9.25% bonds last traded on the NZX’s debt market on April 20 at 61.6 cents in the dollar.

Southside has offered to buy 10% of the bonds at 30 cents in the dollar, the NZ Herald reported today, citing a letter to bond holders from the Auckland-based developer. Southside director Chris Jones didn’t immediately return calls and the receiver declined to make the letter public.

“It would be prudent for bond holders to wait, as within two weeks they will be sent the report which will outline the likely return and the time frame for payment,” said Deloitte’s David Vance, one of the receivers.

According to the Herald, Southside says in its letter that it wants to buy a strategic stake of 10% to allow “meaningful discussions with the Irongate receiver regarding the disposition of assets".

The offer “also provides the opportunity for small bond holders, many of whom have watched the sad outcome of a number of recent property-related receiverships, to cash up their investment quickly and move on," Southside’s Jones said, according to the report.



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