Nido landlord considers loan to founder/owner: Maat company owns $59m store

The landlord of New Zealand's biggest homeware and furniture retailer is talking to the founder of the retail business about loaning him money after the store's builder went into liquidation.

Neil Tuffin, managing director of Albany-headquartered property investment specialist Maat Group, said he was talking to Nido founder and chief Vinod Kumar about providing financial assistance after builder Vijay Holdings went into liquidation this month.

Last March, Maat said it bought the vast 2.7ha Nido building at 156-160 Central Park Dr, Henderson for $59m and sold shares to investors who it is paying 8.5 per cent annually. Returns are paid out monthly.

Maat's tenant is Kumar's Magsons Hardware trading as Nido, Maat says.

"He has inquired and we're looking at a number of options to improve the financial structure," Tuffin said of the Nido business which has an entire Signature Homes house inside the store, showcasing design.

"We are in discussions to strengthen the financial future of the store. It might mean recapitalisation of the Nido retail operation and were we involved, that's an option we are exploring," Tuffin said.

He could not say how much money was required, "because we're undergoing our own processes to assess that. That's a big operation we talking about, potentially $50m a year business," Tuffin said.

He expects a decision to be reached within the next three weeks by Maat which says it takes its name from the Egyptian goddess of truth, justice and balance.

Asked what happened to Maat investors' returns if Magsons defaulted on the rental payments, Tuffin said: "It's our intention to have a strong tenant, whether it be Magsons or some other operator."

Asked if he meant Nido might no longer trade from the premises, Tuffin said nothing had yet been decided and that was exactly what Maat was working on now.

Asked if the Financial Markets Authority had been informed, Tuffin said: "We have no need to do that. We're talking to Vinod regularly but there's a limit to what we can say."

Tuffin was philosophical about Nido store builder Vijay Holdings' liquidation: "Like a lot of construction companies, they ran out of money".

The store cost millions more than budget, was dogged by defects and delays and its builder went under, according to the first Vijay liquidators' report released last week on the company directed by the Fijian Indian migrant, civil engineer and former owner of Mitre 10 Mega stores.

Kumar founded the Nido (Italian for nest), which was said to be set to rival European giant homeware store Ikea.

Kumar said last week that Vijay had completed $122m of building work and been running for about 20 years.

Property records show 158-164 Central Park Dr is owned by Everest Central Investment whose directors are Tuffin and Mark Hughson. Central Park Property Investment is listed by the Companies Office as owning Everest whose offices are listed as Maat's Albany office.

Liquidators Daran Nair and Heiko Draht of Greenlane Chartered Accountants said the company's sole current project was the development of the Nido building and 650-car carpark "for a fixed price of $37.8m. We were informed that to date, a total amount of $44.6m has been spend on the project" but the shareholders could not raise further funding so they decided to liquidate the company.

Blockhouse Bay's Suresh Chandra and Sunita Patel jointly own Vijay. Kumar has no stake in the company but is its sole director.

Customers queued for Nido on June 2. Photo / supplied

In May this year, Tuffin sent a newsletter to investors telling of the Nido project.

"The vision of Vinod Kumar is almost here! The limited opening of the West Auckland furniture superstore is scheduled for the last week of May," Tuffin's newsletter said.

"This project has occupied the minds of Maat now for three years, but Vinod's vision was conceived some 10 years ago. To see it now, with the start line just a short distance away, is a tribute to Vinod's ability to mould a large team together to build this Sky Tower of the west," the newsletter said.

The Nido store would bring a unique offering of not only product but also an array of advanced technology in the warehouse and throughout the store.

"Maat's role is almost complete. We have raised $42m from our very supportive database for this project by way of financing the purchase of the land and construction of the 27,000 sqm building, plus working capital for the business.

"Our current effort is to complete the raising of $2.5m-$3.5m of capital for the second tranche of an investment in shares in Odin Investment Ltd, closing on May 18. However, with significant interest shown, it is likely that this tranche will be closed off in early May," the newsletter said.

The end result of the latest offer was that the share capital raised for Odin would be used by Odin to buy convertible notes issued by Magsons Hardware, the company which will operate the Nido store, Maat's newsletter said.

These notes may be either redeemed at March 31, 2023 or converted into share capital of Magsons Hardware "as the presence of Nido expands in New Zealand", Tuffin's newsletter said.

One Maat client who is a shareholder in Central Park Property said today he had certainly noticed Nido's builder go under and that raised alarm bells with him.

"Of course I'm concerned about it. I've talked to Neil [Tuffin]," he said. A lot of money was at stake but he was reluctant to say any more while matters were unresolved.