Central Okanagan News
Ponderosa financing issue
Castanet hit the streets of Peachland to ask residents how they felt about the possibility of construction being halted at the Ponderosa Development. Watch the video here:
Castanet is still waiting for the company to return calls asking about their comment on the plan.
There seems to be a cash flow problem at the Ponderosa development in Peachland. Court documents say some contractors are not getting paid and work has been halted at the site.
The document also lays out a plan for the developers to get their financial affairs in order.
Representatives of Romspen Investment Corporation based in Toronto petitioned the BC Supreme Court earlier this month asking that an Initial Order be granted and a plan pursued under the Companies’ Creditors Arrangement Act (CCAA).
Further, it asked that business of the Ponderosa respondents be conducted under supervision of a Monitor.
According to documents filed with the BC Supreme Court, Romspen claimed it lent the Ponderosa development $31M to facilitate construction and sale of a golf course and residential development.
A further $10M was provided two months later.
The documents went on to say that, as of April 1 of this year, Romspen was owed in excess of $34.3M.
"Construction of the development has halted due to funding shortages," court papers stated.
"However, further funding is unlikely to be arranged as there is no equity available in the development and construction sub-contractors have filed builders' lien claims totalling in excess of $3M in connection with outstanding trade obligations."
It further claims the Ponderosa development is not capable of paying the petitioner or managing the development to completion.
Romspen also stated that, if an Initial Order is granted, it is prepared to provide interim financing with terms to be determined.
In a ruling handed down by the BC Supreme Court this week, developers are able to remain in control of current and future assets, undertakings and properties while appointing D. Manning and Associates as Monitor.
According to the Ponderosa website, 67 per cent of the current phase of development has been sold.
Calls to the company seeking comment on their plan have not been returned.
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