Investors who own New Zealand's largest new retail property development project are paying 21 per cent on a loan so will meet tomorrow in Auckland to talk about their plight.
Neil Tuffin, managing director of Maat Group which sold shares in Central Park Property Investment, said today the investors would vote on a restructuring proposal tomorrow.
The investors own the largest new homeware and lifestyle store, the 27,000sq m Nido off Lincoln Rd, Henderson, a shop now permanently closed after the concept failed.
Some of the investors are retired farmers who live in the Taranaki area and said they had no idea of the risks involved when they put in sums of up to $1m, promised an 8.5 per cent annual return.
Nido was to be this country's largest homeware, furniture and lifestyle business, trading from the 2.7ha building.
But the land and buildings are up for mortgagee sale after defaults repaying a $25m loan to Pearlfisher Capital which has instructed Bayleys to sell the property.
Shareholders in Central Park Property Investment are meeting to talk about putting even more money into the disastrous venture which has already suffered liquidation of the builder which erected Nido buildings and receivership of the Nido retail business, Magsons Hardware.
Neil Tuffin, managing director of Maat Group which sold investors shares in the Nido property, said the 11am meeting would be at Alexandra Park tomorrow.
"It's a proposal to refinance whereby investors will get a much better outcome," he said.
That is an oblique reference to alternatives which might include the company's receivership or liquidation, but he did not mention those alternatives.
"There's obviously a restructuring process to happen over a number of years for investors to get out of it with a far better return than what they are now facing," he said.
"It's obviously going to take a commitment of capital and our biggest issue is Pearlfisher Capital because their interest rate is 21 per cent," he said.
"We have a proposal to retain that building. That's the overriding sentiment of our investors. We've got to take out Pearlfisher," he said of repaying the $25m loan "as well as penalties and interest".
Tenders for the 3ha site, including the 27,000sq m building, close this week on Wednesday, April 14.
Tony Abraham, Pearlfisher Capital founding shareholder and a director, said his business was the first mortgagee funder of the land and buildings where the Nido store has been constructed. Pearlfisher had loaned the money to Everest.
On March 12, Tuffin wrote to 229 investors in the company telling them how extra money was needed to repay part of the $25m Pearlfisher loan.
Tuffin wrote then that 183 investors had responded and of those, 131 had committed to funding a required $4.96m.
"Due to the overwhelming intention from investors to retain the ownership of the property, our focus is to have a strategy to achieve this preferred outcome," Tuffin wrote last month.
"Investors need to provide further support to preserve their investment. We are presently working with an external party to assist in the retention of the ownership of the property for investors."
He is also unhappy about Mark Francis of Augusta Capital and Mark Schiele of Oyster raising concerns about the Central Park Property Investment scheme.
"They're competitors," Tuffin said of Augusta and Oyster.
"We're trying to retrieve this. This is different - this is a development project," Tuffin said when asked about the Central Park scheme compared to offers Augusta and Oyster was making to investors.
"We have 14 other ones where investors will get over 200 per cent back," Tuffin said of other Maat offers.
Tuffin said he and accountant Mark Hughson would be heading the meeting. Around 70 per cent of investors live north of Taupō, Tuffin said. Some investors could not attend the meeting in person.