Bridgecorp New Zealand free of Westpoint

Finance company Bridgecorp Holdings's problems relating to a A$450 million ($512 million) property company collapse in Australia shouldn't result in a trading loss for its Australian arm and won't affect its New Zealand operations at all, says marketing manager Joanne Tait.

Monday, 13 March 2006

Bridgecorp and fellow New Zealand finance company Hanover Group jointly provided second mortgage funding to a Westpoint retail and apartment development in Melbourne.

She says the Westpoint loan is financed by Bridgecorp Australia and has no direct effect on the operation of the Bridgecorp New Zealand business, which has not lent any money, nor has any exposure, to Westpoint.

"The Westpoint situation does not jeopardise any investments made by New Zealand investors in its New Zealand investment products," she says.

Tait says Bridgecorp and Hanover's loans rank behind a $A61 million first mortgage but that they have appointed a receiver to manage the 305 apartment project through to completion, which is expected by the middle of this year.

Bridgecorp's total exposure is $A26 million, she says. That's more than the A$20 million limit to a single borrower outlined in the prospectus, but is allowed with the board's approval, she says.

Bridgecorp Australia's total assets at June last year were about A$160 million and shareholders' equity was more than A$17 million, she says.

The Melbourne complex has an estimated value of A$150 million on completion.

Unconditional pre sales already total A$103 million, she says.

ASIC criticised Bridgecorp's prospectus for failing to disclose its full exposure to Westpoint. Tait says Bridgecorp is working closely with ASIC "to ensure that the prospectus is presented in a clear, concise and effective way."

She says the company expects to recover its loan principal but may not receive all the interest and fee income to which it is entitled.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Deposit Rates go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.