Delta half year results: update on Yaldhurst subdivision debt recovery
Delta stated in its 2015 annual report that it has an outstanding debt related to infrastructure services provided through its now-closed civil construction business in Christchurch for the Yaldhurst subdivision.
The outstanding debt is secured by a mix of mortgage securities and general security arrangements.
In its half year report for the six months to 31 December 2015, due for release next week, Delta has reassessed the fair value of its secured loan balances at $13.3 million by reference to an independent market valuation of the property.
Recovery of the outstanding debt has been held up by a longstanding dispute between the developer and neighbouring properties that has delayed titles being issued for the subdivision. Delta understands that those matters remain before the Court.
The first mortgagee for the Yaldhurst subdivision, Gold Band Finance Limited, has put the Yaldhurst subdivision to tender. Delta is the next secured creditor after Gold Band Finance Limited.
Delta believes the tender process is positive progress towards the company recovering the outstanding debt and the most significant movement for some time.
For its part, Delta has taken, and continues to take, active steps to protect its security interests in the Yaldhurst subdivision and to recover the outstanding debt. Delta regularly updates its shareholder, Dunedin City Holdings Limited, on the status of debt recovery activities.
Delta’s position as a secured creditor is unaffected by the commencement of the mortgagee sale. The deadline for tenders was 12 February 2016.
A successful conclusion of the sale by the first mortgagee will remove the main obstacle to the subdivision being put onto the market and Delta beginning to recover its outstanding debt.
There has been public consideration of the roading layout at the Yaldhurst subdivision. By way of clarification, the roading was built by Delta for the subdivision owner to specifications Delta understands were approved by Christchurch City Council.
Following a subsequent safety audit, minor modifications were requested by traffic engineers working for Christchurch City Council and the Council resolved to authorise acceptance of the roading subject to final completion of those modifications.