Chinese buyer for Gulf Harbour
Allied Farmers and Bank of Scotland International look set to take a $121 million loss on the sale of the Gulf Harbour development north of Auckland when it is sold to interests associated with Jiang Zhaobai, the Chinese tycoon behind the company buying the Crafar farms.
Jiang is buying both sets of properties out of receivership.
While the price being paid for the Crafar dairy farms in the central North Island has not been revealed, the debt owed on the farms to a consortium of banks led by Westpac is $274m, according to the receivers.
Gulf Harbour, a sprawling residential project being developed alongside a marina and golf course on the Whangaparaoa Peninsula, owes Bank of Scotland International (BOSI) $118m and Allied Farmers Investments $38m, according to its receiver, Tim Downes of Grant Thornton.
Reliable sources have told the Sunday Star-Times that the property is being bought for $35m, although Downes would neither confirm nor deny the figure, which would mean that Allied Farmers as the second mortgagee would get nothing and BOSI would take a loss of at least $83m on the project.
Allied acquired its mortgage on the property from Hanover Finance as part of a controversial capital restructuring.
Jiang is one of China's wealthiest businessmen, with a net worth estimated by Forbes magazine at around $800m. His company Shanghai Pengxin Group is a multinational conglomerate with assets ranging from an extensive property portfolio in Asia to mining interests in Africa and agricultural companies.
The purchase of Gulf Harbour is being arranged through Top Harbour Ltd, a New Zealand registered company set up by Auckland businessman Terry Lee, a close associate of Jiang. The two men are the co-directors of two other New Zealand companies, Nature Pure Ltd and Milk New Zealand Corporation Ltd.
The Sunday Star-Times understands Top Harbour is backed by a syndicate of Chinese investors including Jiang, and that his interest in it is being overseen by one of its directors, Zhang Fuqiang, a Shanghai Pengxin executive.
Under the deal, which is subject only to Overseas Investment Office (OIO) approval, Top Harbour will acquire the remaining 31ha of undeveloped land at Gulf Harbour, most of which is zoned for residential development with some commercial development possible along a harbourside strip known as Hobbs Wharf.
Development work at the project has stalled since it went into receivership in December 2009, however work is likely to commence on the project reasonably quickly once the deal is settled, because Jiang's involvement means the development will not be reliant of bank funding
Downes said the new owners' access to capital meant they would be able to build homes and then promote them to buyers, rather than have to try and pre-sell a certain number off plan before banks would provide development funding. That would make the project more likely to succeed as buyers would see what they were getting.
Downes said he was hopeful the OIO would approve the transaction shortly.
- Sunday Star Times