New deal for Metropolis bondholders

Trustee says new prospectus should be ready late October

Metropolis developer Andrew Krukziener hopes to have a proposal ready for consideration by bondholders in the second half of October, Tower Trust general manager Glenn Clark told the 1700 bondholders in a letter sent out last Friday.

They were to have been repaid their $21 million of capital in May. Instead, they have been waiting for workable new proposals to be put in place.

Mr Clark, as trustee for the Pacific Properties (Metropolis) Ltd bonds, served a default notice on 22 May. At that stage the bondholders were owed $4.4 million in interest, which was payable at 14%.

In his latest letter, Mr Clark said the key terms of a new proposal were worth considering, but two significant items had to be finalised before it could be documented and presented to the bondholders.

First, the ANZ Bank had to extend its first mortgage or be replaced by other finance. Second, a new prospectus would be required.

“Mr Krukziener is confident that he will have secured appropriate first mortgage finance and finalised the prospectus so that the proposal is ready for consideration by mid-October.

“When the proposal is ready for your consideration Mr Krukziener intends convening a meeting of investors to present it and he is confident this will happen by late October,” Mr Clark said.

Meanwhile, $6.6 million of Metropolis apartments have been sold since the start of June. Proceeds net of commissions go to the ANZ.

Mr Clark said he expected to write another letter to bondholders early in October.

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