• Chris Wilson, agent for stage 6 of Eden Cove, pictured earlier this year when the news about the development was all positive. Now there are doubts about its future following the collapse of the Banksia Group in Melbourne last week.
The announcement last Friday of the collapse of the Banksia Group has caused concern over the future of Stage 6 of the Eden Cove development.
The failed Banksia Group are the mortgagor in possession of the Stage 6 development, and were providing $3m funding to support the subdivision.
McGrathNicol were appointed as receivers and managers to the failed non-bank lender last Thursday and have commenced the difficult process of unravelling the detail of the $650million owed by Banksia to investors, primarily in the form of funds advanced to borrowers to finance real estate property purchases.
Peter Flude, Eden Cove Stage 6 project manager, met with receivers McGrathNicol on Monday in Melbourne and was still positive about the development’s future.
“I met with the receivers yesterday (Monday). They were only appointed last Thursday and are wading through the numbers of projects Banksia are involved in. It’s quite extensive,” Mr Flude told the Magnet on Tuesday.
“I think it’s far too early to be predicting that Banksia are pulling the plug on the Snug Cove development.
“I think there’s a very, very good possibility that Banksia will come through.
“They funded us to just under $3m for stage 6 and we’re still hopeful that funding will be available when required.
“In the short term, there’s the period of just not knowing until the receivers complete their investigations,” he said.
“I meet again with them (McGrathNicol) in about a fortnights time for an update. Obviously it’s in their hands, and they are in a far better position to know what outcome there will be.”
Ten blocks have already been sold off the plan. However purchaser’s deposits are not in any way threatened according to Mr Flude, with these monies being held in trust by the solicitors.
“The ones that have purchased, their monies are not in any way handled by Banksia. They are held in the trust account by the solicitors. If Banksia do pull the plug then investors receive their deposits back straight away, plus interest,” Mr Flude said.
“But I think it’s far too early to be predicting that.
“I’m still hopeful. The project management team is carrying on with business as usual. I’m meeting up with them (the receivers) in a fortnight’s time to find out more.
“We’re not in the construction phase as yet but we are doing the strategic planning for headworks etc. Then we go through the DA process which has commenced but we can’t lodge a DA with council until the infrastructure strategy has been finalised and that’s been a slow process,” Peter Flude said.
Mr Flude had positive meetings with councillors Sharon Tapscott, Russell Fitzpatrick and Michael Britten recently about the development and has future planning sessions with mayor Bill Taylor and Bega Valley Shire Council general manager Peter Tegart on November 12.
“If Banksia (does go under) control of Eden Cove stage 6 would move from them to a new owner and you would assume the new owner would want to continue with the development.
“We’re hopeful that Banksia will ride out this difficult period and continue to fund the project and our almost $3m facility will be available. The funding isn’t extensive (at this point) because it’s for professional fees to cover surveyors, lawyers, valuers, lawyers, accountants, town planners and such.
“I was more positive from yesterday’s (Monday) meeting with the receivers than I was beforehand. They told me at that meeting that they weren’t going to proceed to close the project down.
“The project management team are continuing to work on the basis that we will get funded. I have my meetings with council on the 12th and by then I wall have more information, although I don’t think we’ll have a final answer by then.
“This is an outstanding project and we’re pleased with the progress we were making. We can see the expenditure (from the project) over the next ten years as being very important for the town. Up until last Thursday things were looking pretty positive. Now we’re in no man’s land.”