Pegasus town developer in receivership
The developer of the partly built Pegasus township north of Christchurch has been put into receivership over an outstanding loan.
Receiver Simon Thorne confirmed last night that Pegasus Town Ltd was in receivership, but would not make further comment.
Bob Robertson, who owns half the company, said difficulty refinancing a loan was behind the trouble.
He said it should be business as usual for the town, and the move would have no effect on residents and section buyers.
"We've had incredible section sales and the project itself is looking very vibrant. There's been $50 million of sales since Christmas, and we've had good cash flow for the past year or so."
The receivership action was taken by New Zealand Property Finance Partners, an investment consortium owned by Australia's Brookfield group and investment banker Goldman Sachs. The consortium bought a loan over Pegasus Town Ltd at a knock-down price from the Bank of Scotland last year.
Pegasus Town had undertaken to buy back the loan from Brookfield and Goldman Sachs, but could not get the finance.
Robertson said he had a New Zealand lender who had agreed to refinance the loan, but "we were unable to get the deal across the line in time and Brookfield have run out of patience". He hoped the loan could be refinanced next week.
"It's an immensely difficult time for anyone doing business of this scale in Christchurch, and it's an unstable time in financial markets globally.
"There is no outstanding money at Pegasus, there's nothing owed, but this debt purchase has been a problem."
The $10m extra needed to bring the remaining unformed Pegasus sections up to building standard after the quakes "didn't help".
Robertson believed that if the loan could not be refinanced, Brookfield might take over the management of Pegasus. Pegasus Town Ltd is half owned by Robertson's company, Infinity Investment Group, and half by investors in Oamaru and Queenstown.
The town has been under development for eight years and now has about 600 residents out of an intended 7000.
The town's artificial lake, golf course, cafe and general store are open but other promised amenities have not yet been built.
Local Real Estate Institute president Tony McPherson advised any Pegasus section buyer with concerns to contact their lawyer for advice.
"Most receivers want to get the best out of the situation and for the project, and they will want to trade through and see all the sales completed."
Long-standing real estate agent David Rankin said it was now up to the receivers to decide how to handle the development. They could continue to develop it but that would depend on how much capital was needed and whether the titles were ready for issue.
Another discomforting aspect was that a receivership tended to depress the price of sections, and subsequent buyers could buy them for less than those with existing contracts.
Craig Patterson, building four homes for buyers at Pegasus, was last night surprised to be told of the receivership by The Press.
Patterson said he had two unsold sections remaining "and if the worst came to the worst, I would build on them anyway and rent them out".