Heartland NZ has confirmed it is taking control of a Nelson subdivision that is the security for one of its toxic loans.
The loan is one of several alluded to in last week’s full-year result from Heartland.
Mark Mountcastle, chief risk officer at Heartland, confirmed that the company had “taken charge” of the development at Artillery Place, Nelson.
The debt has grown to about $8 million with penalty interest.
The property was acquired by Victoria Properties Consolidated in 2005 for $5.4 million with an optimistic forecast of potential value of $18 million to be gleaned from section sales after rezoning.
But sales dried up and some buyers refused to settle. The subdivision consists of roading and infrastructure but no buildings.
About 150 mainly Otago investors have money in the Victoria group, which is managed by Britannia Management, whose directors include National Party director and Canterbury Westland chairman Roger Bridge and financial adviser Craig Myles.
Mr Bridge has failed to return phone calls but Mr Myles spoke to NBR ONLINE a couple of weeks ago to confirm the facts and said no loss to investors had been crystallised yet.
Mr Mountcastle says valuations have been obtained but will not say when marketing will begin or how the properties are to be sold.
Chris Hutching for NBR NZ Property Investor
Wed, 05 Sep 2012
Wed, 05 Sep 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Heartland moves over toxic Nelson loan
23519