Kinloch course goes to poultry family

Jack Nicklaus at Kinloch. Photo / Sarah Ivey

The beleaguered Jack Nicklaus signature golf course at Kinloch has changed hands for the second time in two years.

The deal is good news for shareholders in rural services company Allied Farmers, which has now managed to extract itself from the troubled Kinloch mortgage it inherited when it bought the loan book of Hanover Finance last year.

"We have no further association with Kinloch and I'm very happy," Allied managing director Rob Alloway said.

The 260ha golf course and surrounding development land has been bought by wealthy poultry farming family the Van Den Brinks.

A Van Den Brink company, Instant Funding, held a first ranking mortgage facility of $20 million over the property.

In a statement the family said the purchase brought to an end the financial woes that had surrounded the property for the past few years.

"Kinloch is a world-class asset that has enormous medium and long-term potential. We will be preserving and enhancing this magnificent property," it said.

Controversy has surrounded the course since it was sold by Hanover for $26 million at a mortgagee sale in June 2008.

At that stage Hanover held the first mortgage over the property.

The buyer was a mysterious entity called Coromandel Investment Trustees.

Just after the sale the company which owned the development, Kinloch Golf Resort Limited - whose shareholders included Nicklaus - went into liquidation, owing $49 million.

However Hanover continued to loan money over the course, but this time as second-ranking mortgagee. It gave Coromandel Investment Trustees a $40 million loan of which $24 million was understood to have been drawn down. This is the loan Allied inherited.

It has been widely speculated that the Hanover/Coromandel sale was an "inside job".

Alloway said Allied had reduced its loan over the property by swapping it for a freehold block of rural land near Taupo and "a lump of cash".

The balance of the loan had been sold to another lender.

He would not reveal how much Allied had realised from the asset except to say that "anything over nothing was a good result".

The amount was less than the $3.4 million worth of property sales Allied announced to the Stock Exchange last week.

"The primary lender [Instant Funding] had a priority amount that would have easily swallowed the value of the property.

"It's not a particularly nice asset, given the location and where the economy's gone."

Kinloch had cost Hanover investors a considerable sum, he said.