University of Canterbury pays $550m for earthquake claim
The University of Canterbury can claim $550 million to cover the damage wrought by the series of earthquakes in 2010 and 2011 after reaching an agreement with its insurers.
The university will receive an additional $247 million to claims already paid or agreed to be paid, taking its total claim to just over half a billion dollars under the Universities NZ collective insurance policy, which will be used to rebuild the campus, vice-chancellor Rod Carr said in a statement. The Canterbury earthquakes damaged university buildings and scared off students, forcing it to take charges of $150 million in write downs and impairments in 2011 and resulting in a $114 million loss that year.
Insurance reimbursements are still a feature of the university's revenue, making up $40.7 million of the $188 million it recognised in the six months ended June 30 this year. It warned of "significant volatility" in reported results in the face of ongoing remediation work.
In September the university tripled its borrowing limit to $150 million and signed a formal agreement for $260 million of government funding toward the $357 million cost of the engineering faculty and innovation centre. The funds were first flagged last October for key projects to rebuild the campus after the quakes in 2010 and 2011 and are part of a total spending plan of $1 billion over the next 10 years.
Trading in the NZDX-listed bonds has been halted since Dec. 3 and the notes last traded at a yield of 3.3 percent. The bonds carry an annual interest rate of 7.25 percent, which is being reset to 5.77 percent tomorrow.