Metropolis bondholders still waiting...

Investors waiting to be repaid the more than $20 million they invested in Auckland's Metropolis building have been given a mix of good and not so-good news.

The latest letter from trustee, Tower Trust, to the 1700 investors who own Metropolis Subordinated Property Bonds, says that the developer Andrew Krukziener has made 'commendable' progress disposing of the unsold apartments and penthouses, thus bring the amount owed to the ANZ down. However, Tower Trust general manager Glenn Clark also expresses frustration that Krukziener has still failed to deliver a prospectus for a new investment proposal.

"It is disappointing that almost a year after Krukziener’s company defaulted on repaying your investment, and after he promised you a new investment proposal, the proposal is still not in your hands," Clark says.

He says that "the proposal that Krukziener intends to put to bondholders is still being worked on by his advisers. While I consider the rate of progress of the proposal to be unreasonably slow, it is not impeding the sales process that is necessary to repay ANZ Bank and recover as much as possible of your investment."

Clark says that so far this year Krukziener has sold $8.9 million worth of space in the building, which includes six penthouse apartments, leaving just two of the 21 penthouse apartments unsold. He says the prices have been close to valuation.

The mortgage to the ANZ, which ranks ahead of the investors' subordinated property bonds has now been reduced to about $7 million.

Still to be sold are six of the 345 serviced apartments, super-penthouse apartments on levels 35, 37 and 38 plus retail premises on High Street and untenanted retail premises on level two.

An investment put together by another financial planning firm has made the realisation task harder.

Recently Harts Contributory Mortgages put 10 Metropolis apartments up for auction after an Indonesian investment firm defaulted on a loan last year.

Nine of the apartments were sold by Bayleys Real Estate at prices reported to be, on average, 26% below what the company originally paid.

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