CHOW BROTHERS BUY STONEWOOD HOMES

Wednesday 9th March 2016

Property magnates the Chow Brothers and Corporate finance specialist Clint Webber have bought the troubled Stonewood Homes business assets (third largest house building company in NZ) – both the national franchise rights and the Christchurch franchisee – from receivers KordaMentha for an undisclosed sum.

The Chow brothers have a proven business track record, having built a $200 million portfolio of commercial buildings in Auckland, Wellington and Rotorua in just 18 years with 200 employees working for the group between Auckland Wellington. “Stonewood complements our office, retail, accommodation, and car park property portfolio,” said John Chow in Christchurch today. Between them, the Chow’s and Webber’s have extensive experience financing and managing complex restructures and with the Chow Group's solid cash flow, it makes this opportunity “a logical fit.”

The brothers, and Mr Webber are committed to turning Stonewood around and regaining customer and supplier trust. “This purchase signals our clear intention to repair recent damage to the brand and to re-establish the Stonewood brand nationally on a very firm footing,” says John. Stonewood is a major player in Canterbury, where it is the region’s second largest residential home builder.

This morning, the Chow brothers and Mr Webber met with all 44 remaining employees and offered them new contracts on similar terms. “While we still have quite a process to work through with the receivers, our next step will be to engage urgently with customers with uncompleted homes. It’s vital we provide certainty for customers who have been affected. We have a management team of eleven here in Christchurch to seal the deal but we ask for tolerance from affected parties” reiterated Mr Webber. “Clint, John and I have young children and we know the stresses of family life. Having your new home plans put at risk from factors out of your control is hugely worrying for parents, and of course our elderly customers, so we will prioritise according to individual needs.” says Michael.

The Chow brothers and Mr Webber are no strangers to big challenges. “There’s a huge task ahead where we need to work with suppliers, tradespeople and franchisees to repair relationships.

“We also need to talk with Master Build to ensure build guarantees are honoured, and engage with local district councils to ensure building consent processes run smoothly.”

Michael Chow said he and his brother, and Mr Webber were keenly aware of the profoundly negative downstream commercial implications from Stonewood’s collapse for countless businesses – directly and indirectly – throughout the Canterbury region. “It’s critically important the brand survives in order to reinstate confidence in the region’s rebuild and overall recovery effort.

“As well-capitalised businessmen, with scale and proven commercial success across numerous market sectors, we are well positioned to deliver what the Canterbury market in particular needs right now.

“This is our first major investment into Christchurch and we predict it won’t be our last. We like what we see in the new Christchurch.”

ABOUT THE CHOW BROTHERS

John and Michael’s family immigrated to New Zealand in 1984 from Hong Kong. They started their working life as teenagers, working 12 hour shifts in their parents’ takeaway food outlet in Wellington. From the first accidental foray into repurposing an undervalued commercial asset, the brothers then tried their hand at converting other unoccupied buildings into car parks, warehouses and offices.

Property remains their core business, constituting 90% of the brothers’ combined assets, with a 39% capital growth in assets since 1999. Until Stonewood, investment success has been derived from revamping second hand unprofitable commercial buildings, turning them into properties with regular cash flow with a long-term time horizon.

Just last week they celebrated the successful reverse listing of shell company RIS Group (renamed Chow Group) into which they plan to transfer much of their property portfolio. The Stonewood purchase has been made through a separate company and is not part of to the listed company. The Chow brothers have no plans to rest on their laurels. John and Michael have been on NBR's Rich List for last 3 years and they have publicly declared their plans to grow to a $1 billion empire by 2020.

Any further enquire please email jasmine.mcauslan@cgml.co.nz

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