Again, the developers need us, and want us to survive. They have footed the bill for lodgment, plans, surveys and research at some significant cost and the only way for them to recoup that money is for the development to go ahead.
I can't comment on the bank. I actually used to work in consumer lending for St George when I was at uni, but that's different to commercial. What I do know is that no individual will profit from any of this, so that inference is incorrect. They have factors that are inflexible and I reckon that when we became over-leveraged by a certain amount the red light switched on and thy came knocking.
Before we panic too much; remember this;
- Ben Fairfax believes categorically that the dev will be approved. He knows more about this than anyboday.
- By wiping $10 mill of the debt we save about $1mill a year in interest. Our stake in the 314 units would have been around 5-7 mill but that could be up to 5 years away anyway. So it's much of a muchness but we get the money immediately and the weight around our neck (interest) that is killing us is gone forever.
- the 700 units is not an ambit claim. They have done deep research and modeling based on the planning regs and are confident this amount will get through. There is still plenty of juice in this lemon for us.
