SUNBIZ

Developers Flinch As Hotchin Takes Back Fiji Property Loan

Property developer Kevin Storey says his company Sky King Investments won’t give up its Fiji land easily amid revelations former Hanover boss Mark Hotchin has secured a loan over it.
08 Sep 2014 09:10
Developers Flinch As Hotchin Takes Back Fiji Property Loan
Prime Minister Voreqe Bainimarama (right) with Corrections Service Commissioner Commander Francis Kean at the commissioning of the new chapel on Friday, October 15, 2021. Photo: Leon Lord

Property developer Kevin Storey says his company Sky King Investments won’t give up its Fiji land easily amid revelations former Hanover boss Mark Hotchin has secured a loan over it.

As reported in the National Business Review, Mr Hotchin’s associated company, HF Residual Obligations Limited, has been assigned a loan on a Fiji resort development known as Pacific Point, near Suva

HF Residual assumed the loan from Allied Farmers last September in a move that surprised Mr Storey and his business partner Brent Gibson.

The debt was originally pegged at NZ$25.78 million but has since ballooned to NZ$44 million, according to a receivers’ report on Ocean Pacific Resort Holdings, Sky King’s Parent company. Ocean Pacific is now out of receivership.

Mr Storey says he was told HF Residual wanted to finish the development but there was no agreement on who would share in the outcome.

Sky King still holds title

He says Sky King Investments still holds title to the land but all the consent approvals have lapsed and the company is in breach of its environmental restrictions.

“I said as far as I’m concerned we still own the property in our Fiji company. It needs to be finished but we have to come to an arrangement as to who gets what.”

Mr Storey says Kerry Finnigan, a former Hanover chief executive now working with Mr Hotchin, has recently been in Fiji meeting with lawyers in an attempt to understand whether HF Residual can call in the mortgage and take possession.

“But they can’t do anything without coming through us and we will put up a fight,” Mr Storey says.

NBR understands Ocean Pacific was one of two borrowers that Hanover Finance released personal guarantees on in the days before the deal with Allied Farmers in December 2009.

Unlock freehold title

Mr Storey says back then Ocean Pacific needed about $16 million in development finance to unlock about $80 million worth of freehold titles after developing the landfill into 162 lots.

With Fiji land prices recovering, the property is estimated to be worth about NZ$8 million in its current state.

The transfer of the mortgage is strange because Allied Farmers and Hanover had been fighting each other since day one of the acquisition.

In 2011 Allied settled a NZ$5 million payment for costs associated with the December 2009 debt for equity swap. That settlement was made with HF Residual.

It is understood that leading up to Allied merger deal, Messrs Storey and Gibson had been considering litigation against Hanover over the Pacific Point funding arrangement. That had threatened to derail the deal with Allied Farmers.

Feedback:   rachnal@fijisun.com.fj

 



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