Hyatt sale goes a 'long way' to reducing SCF exposure, receiver says

Wednesday 24th November 2010

The sale of the Auckland Hyatt Regency Hotel has gone a "long way" towards covering the $42.3 million owed to failed lender South Canterbury Finance.

Receiver Kerryn Downey of McGrathNicol said the deal was part of the lender's ongoing attempts to refinance existing loans and claw back cash from defaults.

"The sale has satisfied the two other prior ranking loans and goes a long way on SCF's exposure," Downey said. "We're very pleased with the outcome of the process."

The loan was one of the lender's bigger assets, and Downey said another transaction is expected to be completed soon. He will probably make an announcement next week.

Real estate agency Jones Lang Lasalle Hotels national director Dean Humphries the buyer had ties to New Zealand, but wanted to remain anonymous for the time being, with the deal is expected to settle in late January.

The sale didn't require Overseas Investment Office approval as it was under $100 million and didn't include sensitive land.

The lender's shuffling ownership of the hotel led to the Serious Fraud Office pressing the National Business Review for documents and tapes relating to an investigation into SCF's affairs, which subsequently saw the white-collar crime office up the ante in its probe.

Humphries said the new owner will have to decide on whether it sticks with the Hyatt brand, and that management contracts were often reviewed during sales.

SCF collapsed at the end of August after a protracted bid to keep the firm alive failed to bring on new investors.

The failure sparked a call on the government’s retail deposit guarantee, which saw Finance Minister Bill English immediately pay $1.775 billion for the Crown to take the role as sole creditor.

BusinessDesk.co.nz

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