The company behind stages two and three of Queenstown’s ambitious hotel/apartment development, Kawarau Falls Station, has been placed in receivership.
Grant Thornton New Zealand Ltd’s Tim Downes and Richard Simpson were appointed receivers and managers of Peninsula Road Ltd on Tuesday this week.
The receivership is another blow for Peninsula Road shareholder/director and high-profile Auckland developer Nigel McKenna.
McKenna is a former Rich Lister whose Auckland and Wellington developments have come unstuck during the past year.
Two McKenna companies behind stage one of Kawarau Falls Station were placed in receivership by Bank of Scotland International last May, which was concerned payments on its $117 million loan weren’t up to date.
Its receivers however have allowed stage one to continue to completion stage – due mid-May – and BOSI has since lent another $63m.
Meantime, however, contracts for five-star Westin and four-star Quadrant hotels have lapsed and receivers are apparently shopping around for a new international hotel operator.
Peninsula Road was originally the owner of the entire Kawarau Falls Station site but stage one was later put into another McKenna company.
Stages two and three were mortgaged to Fortress Credit Corporation (Australia) Pty Limited.
Despite the stage one receivership, Queenstown construction companies had still been hopeful stages two and three would be given the green light to enable continuity of work.
Stage two was also to include a 1000-seat conference centre, which would have driven business for the two stage one hotels.
Last week Mountain Scene reported that the stage one receivers were paying Peninsula Road $5000 daily for construction access.
According to a High Court judgment last October, Peninsula Road threatened to ban the two stage one companies from accessing their site via its land.
Those two companies then applied to the High Court for an interim injunction to avert the ban.
The judge awarded the companies a two-week injunction only, with both parties then ordered to attend a settlement conference – where agreement for Peninsula Road to receive $5000 a day was presumably reached.
The stage one receivers last month stated unsecured creditors were owed about $4.9m, but it was unlikely any funds would be available.