Hilton sale could help out St Laurence

Fifty parties have registered an interest in the sale of the Hilton Hotel at the northern tip of Princes Wharf in downtown Auckland. Photo / Steven McNicholl

The sale of five-star hotel Hilton Auckland could see cash flow to investors in the disastrous St Laurence business.

The St Laurence group of companies includes SL Five Star Hotel Investments which owns a stake in the big waterfront property.

St Laurence's receiver Barry Jordan of Deloitte expects an imminent sale. But he warned against people getting their hopes up on either the timing of the Hilton deal or the amount of money heading for investors' pockets.

"It's in everybody's interests if we get a sale away and it's an orderly sale and if there's a good outcome for St Laurence and we get a good price - all the investors get paid and there will be some money coming back to St Laurence," Jordan said yesterday.

"We didn't call for the hotel to be sold. It's a joint decision to sell it between the secured creditor and shareholders," he said, referring to ASB Bank with a first-ranking debenture, followed by second-ranking debenture holder Direct Property Investments, then various shareholders in a group of companies which owns the property.

"We are one shareholder via St Laurence and Brian Fitzgerald is the other," Jordan said of Hilton Auckland's ownership.

Fitzgerald is the Herne Bay businessman involved in bringing Hilton to Taupo.

Sale documents show Hilton Auckland's vendors are Direct Property (No 6) and Princes Wharf Hotel.

Jordan and David Vance's latest six-monthly St Laurence receivership update predicted the final settlement towards the lower end of the 15c-22c total distribution.

Jordan could not say if the money from the Hilton sale would come before Christmas because that would depend on the sales process which is being managed by Jones Lang LaSalle Hotels.

"We're guided by the sales programme. We'll know when we know," Jordan said.

Last month, 50 parties registered an interest in the sale of one of the country's leading tourism assets, developed at the northern tip of Princes Wharf at the foot of downtown Auckland which gets the lion's share of the tourism market.

"There's a lot of costs that have to be paid in - it's an over-simplification to say investors would get half but there will be a return, however that will be carved up," Jordan said.

Secured creditors ASB Bank, Jones Lang LaSalle Hotels and Deloitte would also need to be paid, he said.

Last April, Jordan and David Vance were appointed receivers and managers for various St Laurence companies including SL Five Star Hotel Investments which they said in their latest report has "a 50 per cent ownership interest in the Hilton Hotel, Auckland and a 50 per cent share in the operating company managing the hotel".

The Deloitte receivers also had Direct Property Investments under the St Laurence group. Direct owns the other half of the hotel.

But the receivers said in their latest report they had retired as Direct's receivers and that company was no longer part of the charging group.

Rowland Crone, a Kapiti Coast retiree who bought $20,000 St Laurence capital notes, has recovered only about $2000. He is cynical about St Laurence investors getting a big payout from the Hilton sale but is not anticipating any further payments due to his type of investment.

"It will bring in some money to the receiver, I guess, but whatever comes to investors, I just wonder," Crone said, recalling how St Laurence chief Kevin Podmore had committed to tipping assets into the group which helped convince them of the wisdom of a moratorium.

Some of those assets were his stake in Hilton Auckland, Crone said.

Jordan said Podmore had been extremely helpful and co-operative and he praised the Wellingtonian's involvement in the receivership.

St Laurence's largest assets were its stake in NZX-listed National Property and its management contract of that business, he said. These had been sold for more than $18 million.

ST LAURENCE
* 9431 investors.
* Owed $212m plus interest.
* Stake in Hilton Auckland.