Resort's value slashed: owner

South Canterbury Finance is trying to recover $10 million by selling Wanaka's largest resort but the resort's owner believes his financier will be lucky to get half that.

Six companies associated with Oakridge Resort were put into receivership by South Canterbury Finance in September after defaulting on loan repayments.

Oakridge developer Par Hallberg, who moved to Australia after losing control of the resort, confirmed his companies owed $10.49m to the finance company.

In the depressed market the companies' assets, including the resorts' core buildings, nearby development land and Hallberg's own house, would sell for a fraction of the $20m they were once worth, he said.

"You're only going to achieve 10 to 25 per cent of the value," he said.

"Since there is no support from banks you can only find buyers that have money in their back pocket."

Hallberg went to four banks trying to get a loan to buy back his resort but was turned down.

South Canterbury Finance had bought out Westpac Bank as first mortgage holder on Hallberg's companies but will still lose out on the sale of the resort's assets.

Receiver Gordon Hansen, of PKF Goldsmith Fox, said he was close to selling the resort's assets but any sale would result in a shortfall of millions for South Canterbury Finance.

He was still negotiating with several parties, from New Zealand and Australia, who had made offers to buy some or all of the assets.

In the meantime, the resort, which employs 30 staff, was running normally and all other secured and preferential creditors had been paid.

Unsecured creditors, owed $387,989, would not be paid, he said.

Hallberg said he incurred the debt to South Canterbury Finance in an attempt to turn 25 hectares of land beside Oakridge into a 48-villa development.

After pouring $5m into establishing infrastructure and securing resource consent for the land, Hallberg's Australian buyer pulled out, leaving him with no money to repay South Canterbury Finance.

Nearly 30 per cent of South Canterbury Finance's loans are for property, and in the year to June, it made specific provisions for impaired property loans of $48m. It needs a significant equity injection.

The Oakridge receivership does not include the resort's 172 apartments, which have already been sold to other investors.

- © Fairfax NZ News