Receiver cautious on Richmond Smart

Press, 8 March 1989, Page 38

Receiver cautious on Richmond Smart

By

REY CHAPMAN

in Auckland

Early resolution of any of the major matters confronting the statutory receivers appointed to Richmond Smart Corporation is unlikely. One of the appointed receivers, Mr Graeme McDonald, told reporters yesterday that it is simply too early in the receivership for values to be put on assets involved, or to arrive at an assessment of how the receivership would be resolved. Mr McDonald agreed that estimates of such things as property values and the likely extent of residual shareholders’ funds did little to clarify the over-all situation. What matters in the long run is what the assets realise, he said. There are two major avenues which have to be traversed, those companies involved in industrial activities where values can be assessed with some degree of certainty, and the group’s property undertakings where assessments of value are much more difficult. Mr McDonald confirmed that an

overseas buyer was seriously interested in buying the Plimmer City Centre in Wellington, and would be coming to New Zealand “shortly” for discussions. He declined to identify the country of origin of the prospective buyer or precisely when the visit would be made. “It is only when discussions of this sort take place that you find out what a building is really worth,” he said. Before the appointment of statutory receivers, four other appointments had been made to Richmond Smart consituent companies, with a further company, Richmond Development Company being placed in provisional liquidation. The earlier receiverships have now been suspended, but the question of ascendency in respect of the Richmond Development liquidation has still to be settled. Mr McDonald said there would be an orderly sell down of assets at the best possible prices. He did not discount the possibility that some of the industrial subsidiaries could

trade out of receivership, but the likelihood was not great. “It is a possibility that we would certainly not entirely discount,” he said. When asked about the status of a legal action against the company being taken by Mr Ollie Newland, a former principal of Landmark Corporation, Mr McDonald said that as soon as statutory receivers were appointed all legal actions were “stayed” and would subsequently be dealt with on an individual basis. Mr McDonald said there were 95 entities involved in the receivership, and the sheer size of the job to be done was a major problem. He later confirmed that approaches had been made by prospective purchasers of the hotel division and that talks would continue. He said it was preferable to sell the eight hotels as one entity. The group employs about 1000 people, Mr McDonald said, and there would be no redundancies.