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$40 million insurance payout clears way for Gloucester


NEWS RELEASE

15 August 2012

$40 million insurance payout clears way for Gloucester investors to recoup original investment and more

Investors of SPI Capital’s Gloucester syndicate in Christchurch are set for a vote that could terminate the scheme and recoup more than their original investment after insurers paid out on the earthquake-damaged Farmers Car Park building.

Now that a $40 million insurance claim on the to be demolished building has been finalised with Zurich Insurance, a notice of extraordinary meeting of the syndicate has been sent to investors in order to terminate the scheme, sell the land, realise the assets and make distributions to investors. Funds are already in the solicitor’s trust account, ready to be released after the meeting, which is set to take place on 29th August.

Distributions, which will be made following a vote of 55% or more of investors to terminate the scheme and distribute funds from the disposal of assets, will take the form of:

• An initial distribution amounting to $27,000 per interest, which is more than the $25,000 originally invested capital

• On top of this, investors will subsequently receive proceeds from the remaining share of the land and residual cash after all termination costs are paid.

Murray Alcock, Director of SPI Capital, which manages the syndicate, says that the insurance cash distribution means that Investors will receive their original invested cash back and more.

“After a long claim process, we can now formally move to terminate the scheme and distribute proceeds to all investors.

“The syndicate has produced strong cash returns averaging 10.3% per annum throughout the life of the investment, paid monthly to all investors until the earthquake, and will now provide the return of capital and further profits from residual investment assets.

“We are pleased that the final insurance payout has been agreed at over $40m, which is well above the indemnity value and a very good result for investors. Further to this there is more to come following the realisation of the remaining assets of the syndicate.”

Alcock says that the new Christchurch 100 day plan released by Christchurch Central Development Unit has identified the syndicate’s land as required for the proposed Convention Centre.

“The process of purchase is that a market valuation will be established and a mandatory purchase by CCDU made on that valuation. Although CCDU have placed a 10 year caveat on all anchor projects, it is likely that they will want to move reasonably quickly to develop the Convention Centre.”

The Gloucester Syndicate will finish having paid an average of 10.3% cash return, full return of invested capital to investors plus further profits following the realisation of the remaining assets.

ENDS

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