Creditor protection sought by large Vancouver real estate developer over $700M debt
A real estate developer with a number of large properties in Vancouver is seeking creditor protection, citing approximately $700 million in outstanding debt.
Coromandel Properties Ltd. filed a petition in B.C. Supreme Court asking for more time to seek equity from existing partners or new partners.
In a statement to CBC News, the company confirmed it recently submitted a petition for relief under the Companies Creditors Arrangement Act (CCAA), which was created for commercial enterprises to help them restructure after an insolvency.
"If the court grants its request for protection, Coromandel will work towards restructuring its finances and advance its operations," the statement reads.
According to the petition, the company is involved in 16 real estate projects in Vancouver. The company's website highlights two properties.
Frame, a 10-storey development on Kingsway, has 219 units, some of which have been sold, but construction financing has been halted after pre-sale requirements were not met, the petition says.
Construction is 60 per cent complete on Oak West 52, located near Oak Street and West 52nd Avenue. It consists of 23 townhouses, 22 of which have been sold, the petition says.
Development process 'complex, expensive and slow'
Eight lenders have issued default notices and have made demands on their loans, according to the petition.
It says the company has had difficulty servicing debt amid rising interest rates. It also cites the city's real estate development process, which is described as "complex, expensive and slow."
"The pace of developing the various projects has been slower than anticipated due to the lengthy application process and the discussions with the City surrounding density potential and social housing requirements," it reads.
"Accordingly, there have been significant delays in moving projects to completion, resulting in a lack of sales."
The petition goes on to say the developers have "insufficient cash flow to complete development of the projects, have been unable to refinance their existing debts and liabilities or sell assets at sufficient prices to avoid loss … As a result, the development work on the various properties is in jeopardy."
The petition says without CCAA protection, Coromandel will not be able to explore restructuring "and may be forced to liquidate its assets on a fire sale basis."
