ATC

[Taku Umanga]

Just posted online by Barry Lichter:

Fears about the future of the Auckland Trotting Club were reignited today with news that the Chinese buyers of its Pukekohe training property have failed to meet the payment deadline.

In a development which ATC president Jamie Mackinnon described as “disappointing” in a newsletter to members, Mount Hope Limited did not come up with the outstanding $90 million due last Friday.

With the club between $70 million and $80 million in debt and accruing interest of more than $500,000 a month, the $100 million deal was seen as its sole lifeline.

But Mackinnon said the club remained hopeful that Mount Hope would still settle, its lawyers saying they were still committed to buying the land and were actively seeking offshore finance.

Mackinnon said the club had now issued Mount Hope a notice requiring them to settle within 12 clear working days. At the expiry of that period the ATC could then elect to exercise it rights and remedies under the sale agreement, which includes Mount Hope forfeiting its 10% deposit of $10 million.

“On a positive note, the ATC still owns the land, has achieved a Unity Plan Change, and, we have already repaid part of the Club’s bank debt from the $10 million deposit.”

Mackinnon said the sale agreement provided for penalty interest to accrue at 14%pa.

Mackinnon said the club was exploring a plan B in the event Mount Hope did not front up with the money.

In an earlier September newsletter, Mackinnon attempted to defuse rumours that Mount Hope would not be settling the deal on time, saying no extension of settlement had been sought.

Mount Hope’s lawyer had advised the movement of funds out of China was proving difficult and Mount Hope would be seeking alternative finance should that continue.

But the default should come as no surprise given China’s unprecedented crisis and the far-reaching effects of the collapse of several of its real estate giants.

In August, a developer walked away from a $30 million land deal in South Auckland, forfeiting its $5 million deposit.

Mackinnon previously said if the Chinese buyer pulled out of the Pukekohe deal, the club would still be OK as it could then keep the $10 million deposit and put the property back on the market with the benefit of the zoning having been changed.

But industry experts say the chances of the ATC getting anywhere near $100 million for the land are remote, that figure considered “enormous overs” even when it was inked and the market being considerably depressed now.

When the Chinese deal was struck, the 35.2 ha of land, before rezoning, was valued on the ATC’s books at $29 million and Fletchers had offered only $35 million.

The implications of a lower sale price could be catastrophic for harness racing in the North Island.

Even if it could stave off closure, the club would not have the money to build a new training centre, a vital feeding ground for its already depleted horse numbers.

The ATC, which lost at least $108 million on its failed apartment developments, is understood to be meeting with its bankers to consider the development.

[Brodie]

5 hours ago, Taku Umanga said:

Just posted online by Barry Lichter:

Fears about the future of the Auckland Trotting Club were reignited today with news that the Chinese buyers of its Pukekohe training property have failed to meet the payment deadline.

In a development which ATC president Jamie Mackinnon described as “disappointing” in a newsletter to members, Mount Hope Limited did not come up with the outstanding $90 million due last Friday.

With the club between $70 million and $80 million in debt and accruing interest of more than $500,000 a month, the $100 million deal was seen as its sole lifeline.

But Mackinnon said the club remained hopeful that Mount Hope would still settle, its lawyers saying they were still committed to buying the land and were actively seeking offshore finance.

Mackinnon said the club had now issued Mount Hope a notice requiring them to settle within 12 clear working days. At the expiry of that period the ATC could then elect to exercise it rights and remedies under the sale agreement, which includes Mount Hope forfeiting its 10% deposit of $10 million.

“On a positive note, the ATC still owns the land, has achieved a Unity Plan Change, and, we have already repaid part of the Club’s bank debt from the $10 million deposit.”

Mackinnon said the sale agreement provided for penalty interest to accrue at 14%pa.

Mackinnon said the club was exploring a plan B in the event Mount Hope did not front up with the money.

In an earlier September newsletter, Mackinnon attempted to defuse rumours that Mount Hope would not be settling the deal on time, saying no extension of settlement had been sought.

Mount Hope’s lawyer had advised the movement of funds out of China was proving difficult and Mount Hope would be seeking alternative finance should that continue.

But the default should come as no surprise given China’s unprecedented crisis and the far-reaching effects of the collapse of several of its real estate giants.

In August, a developer walked away from a $30 million land deal in South Auckland, forfeiting its $5 million deposit.

Mackinnon previously said if the Chinese buyer pulled out of the Pukekohe deal, the club would still be OK as it could then keep the $10 million deposit and put the property back on the market with the benefit of the zoning having been changed.

But industry experts say the chances of the ATC getting anywhere near $100 million for the land are remote, that figure considered “enormous overs” even when it was inked and the market being considerably depressed now.

When the Chinese deal was struck, the 35.2 ha of land, before rezoning, was valued on the ATC’s books at $29 million and Fletchers had offered only $35 million.

The implications of a lower sale price could be catastrophic for harness racing in the North Island.

Even if it could stave off closure, the club would not have the money to build a new training centre, a vital feeding ground for its already depleted horse numbers.

The ATC, which lost at least $108 million on its failed apartment developments, is understood to be meeting with its bankers to consider the development.

Unfortunately there is no way that the Chinese are going to be settling.

They have changed their mind and wasnt hard to see that this was going to happen!

They will get to keep the deposit of $10m but at $500k per month interest and time it is going to take to actually sell it at its reduced true market value, it is going to be a catastrophe for Auckland.

[the galah]

As i've mentioned before,given the well known, ongoing current plight of the auckland club,doesn't it raise questions about the quality of decisions being made by those calling the shots at HRNZ.

i mean,why would HRNZ be investing so much of industry funds,of which there is only a finite supply,into ensuring the auckland trotting club continues at alexandra park.

HRNZ continue to say that because such a large % of the population live in auckland,that racing must remain in auckland and that aleaxandra park need funding stakes wise to ensure that happens.

doesn't that all seem rather foolhardy and a strategy that is fraught with risks to the industry as a whole.

 

Edited November 14 by the galah