This article is from the Australian Property Journal archive
AUSTRALIAN controlled property finance group Bridgecorp has been placed into receivership with more than 18,000 New Zealand mums and dads investors left wondering about more than $A550 million worth of investments after the company defaulted on loan repayments.
Receivers are expected to be appointed to Bridgecorp’s Australian businesses today.
Bridgecorp is reputedly the second largest property finance and development group in New Zealand and follows the $A1 billion failure in Australia of similar high risk debenture property finance companies ACR, Fincorp and Westpoint.
In New Zealand, other property finance companies to fail in recent times include National Finance, Provincial Finance and Western Bay Finance.
Sydney-based parent company, Bridgecorp Holdings and its finance arm Bridgecorp Finance, also has thousands of Australian based investors.
Receiver John Waller, of Pricewaterhouse Coopers, said Bridgecorp and its subsidiaries were placed in receivership at the request of its directors after defaulting on loan repayments last week – this breaching terms of its trust deed.
Like its Australian counterparts, Bridgecorp – reportedly the seventh largest finance company in New Zealand – raises funds usually mums and dads investors with the lure of higher than normal interest rates and then on-lends those funds to property developers who struggle to get funding from banks due to the high risk nature of their property projects.
PwC’s Waller said yesterday it was too earlier to assess the shortfall in the company accounts, however, market speculation in New Zealand late yesterday put the shortfall at tens of millions of dollars.
In February last year, the Australian Securities and Investment Commission prevented Bridgecorp Finance from raising funds in Australia after finding one of its capital raising prospectus’ “raised significant concerns” about its financial position. Warning signs on Bridgecorp’s businesses heightened in December last year when Bridgecorp Finance was found to have a $A1 million shortfall. It began winding up its operations after never reissuing a prospectus.
Bridgecorp is controlled by former 1980’s NZ high flying businessman Rod Petricevic, a former partner of Sir Michael Fay and David Richwhite. He was chairman of public-listed investment company Euro-National before selling out in 1988.
The New Zealand Stock Exchange repeatedly blocked Bridgecorp’s attempts to list on the NZX.
The company was eventually allowed listed in the NZ Unlisted internet trading platform. The company’s shares are now suspended.
Ironically, on the back of the company’s failure to list the company on the NZX company, chief Petricevic set up the Bridgecorp’s headquarters in the financial heart of Sydney’s CBD.
The Australian parent company’s board includes managing director Petricevic, chairman and lawyer Bruce Davidson, who is also chairman of Law Retirement Plans Limited, finance director Rob Roest, and non-executive directors Gary Urwin, and former chairman of advertising giant Young & Rubicam, Peter Steigrad.
One of the group’s major developments, a resort development at Momi, south of Nadi in Fiji cost the company millions following the military coup in that country. A Bridgecorp entity ended up owing the Fiji government millions in borrowings for the resort. The resort never got off the ground costing Bridgecorp a reported $NZ50 million.
New Zealand analysts told Australian Property Journal late last night that Bridgecorp had been desperately been trying to borrow as much as $NZ350 million at rates as high as 10%.
“The warning signs have been there for some time, but it seems it is yet another New Zealand and Australian property finance company to ‘slip’ under the government financial regulators radar,” one New Zealand finance expert told Australian Property Journal.
Australian Property Journal
