More than half Crown Regional Holdings/Provincial Growth Fund loan book ‘at risk'
'While this increase continues the trend from the previous reporting period, it is not unexpected when factoring the challenging macroeconomic environment,' Rae said.
'It is also important to remind ourselves that the space that the funds are almost universally targeted is into areas that banks and other financiers are either unwilling, or on a very limited basis, prepared to support – which makes our investments inherently more subject to risk.'
CRH's single largest exposure is the expansion and development of Ōpōtiki Harbour, where $110m has been spent to date.
While loans make up the bulk of CRH outgoings, it has also made equity investments in regional businesses – such as the $52m tipped into loss-making Whakatōhea Mussels Ōpōtiki.
Revaluation of CRH's equity portfolio wasn't all one-way in the 2024 financial year.
The 2023 report had impaired a $7m equity investment into lithium and silica extraction startup Geo40 after its main plant suspended production and there were 'material indicators of uncertainty in the going concern of the entity'.
By 2024, however, Geo40 had resumed production and a secondary market share sale had allowed CRH to revalue its equity stake to $6.2m. Geo40 is also the recipient of $10m in loans from CRH.
The release of CRH's 2024 annual report was held up for nearly a year over how to assess its loan and investment portfolio. Audit NZ said it needed to 'ensure that the risks associated with these complexities are addressed appropriately'.
At the end of May, CRH said it was expecting the report to be published in 'mid-June'.
In early July, the Ministry of Business, Innovation and Employment said the report would soon be tabled to Parliament, which finally happened on July 10.
The Audit Note attached to the 2024 report is identical to that filed the previous year, including an emphasis on matters regarding uncertainty in estimating the value of loans and securities and how discount rates and expected credit losses are determined.
The next report is likely to see more write-downs, with CRH flagging a further three loan recipients have entered liquidation since balance date.
In November 2023, CRH approved a loan of up to $5m for Hawke's Bay cherry producer Cherri Global to help the company recover after Cyclone Gabrielle. Less than 18 months later Cherri collapsed into liquidation.
The first report by liquidators PwC showed CRH is among unsecured creditors owed $42m by the Cherri group.
Ashburton-headquartered plant-based food manufacturer Sustainable Foods had been advanced $1.4m by CRH.
Sustainable Foods entered voluntary administration in August. Its proposal to restructure its debts was voted down at the watershed meeting in November and the company had liquidators from PwC appointed.
Despite a general security agreement, the liquidator's second report said the CRH loan was likely to face an $895,616 shortfall.
Overall, Sustainable Foods is expected to leave all creditors more than $2.5m short.
Timber wholesaler Guru NZ was tipped into liquidation in February. CRH is listed as one of six unsecured creditors who are collectively owed $773,085.
Receivers were separately appointed to Guru in March by the China Construction Bank which sought repayment of $3.1m.
The first receivers' report, prepared by McGrathNicol, said Guru owed a total of $14m to creditors and an estimated shortfall of $7.7m would mean unsecured creditors would be left with nothing.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
4 days ago
- RNZ News
Ngāti Porou CEO George Reedy resigns after four years
Te Runanganui o Ngāti Porou has announced the resignation of its chief executive officer George Reedy. Photo: LDR/Paul Rickard Te Rūnanganui o Ngāti Porou chief executive George Reedy has resigned after years of leading the organisation. His resignation will take effect on August 1, Te Rūnanganui o Ngāti Porou (Tronp) confirmed. Reedy served as chief executive across four of the group's entities: Tronp, Ngāti Porou Oranga and Toitū Ngāti Porou. Mayor Rehette Stoltz said she had the utmost respect for Reedy and his departure from the role would be a significant loss for the region. Council chief executive Nedine Thatcher-Swann said it had been a privilege to work alongside Reedy, and on behalf of council staff she wished him "all the very best in whatever comes next". "It is not often you cross paths with someone whose leadership blends mana, humility and sharp strategic thinking, and that's the kind of leader George Reedy is." Reedy was instrumental in forging a strong relationship between the Rūnanganui and council, she said. His leadership was evident through joint efforts in regional economic development planning and civil defence emergency management, "spaces where trust and collaboration matter most", Thatcher Swann said. Reedy's vision and drive led to the creation of over 150 new jobs and a significant increase in their contracted income, Ngati Porou Tiamana (chairman) Patrick Tangaere said in a statement. "It is with both gratitude and regret that I announce the resignation." Under Reedy's leadership, the iwi navigated "some of the most challenging and turbulent periods", including the Covid-19 pandemic and cyclones Hale and Gabrielle, he said. "George played a pivotal role in the establishment of Ngāti Porou Oranga and the expansion of health, housing and social services for our whānau and communities of Te Tairāwhiti." Tangaere also acknowledged Reedy's role in strengthening Ngāti Porou's strategic relationships with local and national iwi, across government and with other key stakeholders. Reedy left Napier to come home and take up the position, he said. "It was a powerful expression of his service to his iwi, reaffirming his dedication to the people and whenua of Te Tairāwhiti," Tangaere said. The statement did not give a reason for Reedy's resignation. Reedy has been approached for comment. East Coast National MP Dana Kirkpatrick said it had been a privilege to work alongside Reedy, having known him for a few years. They had been delighted with the work he had overseen at the Puhi Kai Iti Community Health Centre, and recently with creating its urgent and after-hours care, which was significant for the people of Ngāti Porou and the region, she said. "He has served the community well, and it has been an honour to work with him." LDR is local body journalism co-funded by RNZ and NZ On Air.
Scoop
5 days ago
- Scoop
Ngāti Porou CEO George Reedy Resigns After Four Years
Te Rūnanganui o Ngāti Porou chief executive George Reedy has resigned after years of leading the organisation. His resignation will take effect on August 1, Te Rūnanganui o Ngāti Porou (Tronp) confirmed. Reedy served as chief executive across four of the group's entities: Tronp, Ngāti Porou Oranga and Toitū Ngāti Porou. Mayor Rehette Stoltz said she had the utmost respect for Reedy and his departure from the role would be a significant loss for the region. Council chief executive Nedine Thatcher-Swann said it had been a privilege to work alongside Reedy, and on behalf of council staff she wished him 'all the very best in whatever comes next'. 'It is not often you cross paths with someone whose leadership blends mana, humility and sharp strategic thinking, and that's the kind of leader George Reedy is.' Reedy was instrumental in forging a strong relationship between the Rūnanganui and council, she said. His leadership was evident through joint efforts in regional economic development planning and civil defence emergency management, 'spaces where trust and collaboration matter most', Thatcher Swann said. Reedy's vision and drive led to the creation of over 150 new jobs and a significant increase in their contracted income, Ngati Porou Tiamana (chairman) Patrick Tangaere said in a statement. 'It is with both gratitude and regret that I announce the resignation.' Under Reedy's leadership, the iwi navigated 'some of the most challenging and turbulent periods', including the Covid-19 pandemic and cyclones Hale and Gabrielle, he said. 'George played a pivotal role in the establishment of Ngāti Porou Oranga and the expansion of health, housing and social services for our whānau and communities of Te Tairāwhiti.' Tangaere also acknowledged Reedy's role in strengthening Ngāti Porou's strategic relationships with local and national iwi, across Government and with other key stakeholders. Reedy left Napier to come home and take up the position, he said. 'It was a powerful expression of his service to his iwi, reaffirming his dedication to the people and whenua of Te Tairāwhiti,' Tangaere said. The statement did not give a reason for Reedy's resignation. Reedy has been approached for comment. East Coast National MP Dana Kirkpatrick said it had been a privilege to work alongside Reedy, having known him for a few years. They had been delighted with the work he had overseen at the Puhi Kai Iti Community Health Centre, and recently with creating its urgent and after-hours care, which was significant for the people of Ngāti Porou and the region, she said. 'He has served the community well, and it has been an honour to work with him.'
Otago Daily Times
5 days ago
- Otago Daily Times
Selwyn, Ashburton buck the building trend
Parts of Canterbury are bucking the national trend as new homes continue to go up in the Selwyn and Ashburton districts. Nationally the building sector has had a slowdown, with recent Stats NZ figures showing the number of new builds was down 3.8% in the year to May 2025. But Selwyn and Ashburton have both experienced booms in recent times and now, after a plateau, the numbers are trending back up in both districts. In the last 10 years Selwyn - which includes Rolleston and Lincoln - has had 14,647 new homes consented, an average of 1627 per year. In the 2024-25 year, it issued 1378 consents, a 7.2% increase on the previous year. Council director of development and growth Robert Love said that looking ahead to the current financial year, he is expecting growth to be 'higher than we have seen in the previous two financial years', but not near the peak years of 2020/2021 (1949) and 2021/2022 (2175). In Ashburton, new home builds were up 25.9% in 2024/25, with 204 consents issued - higher than the 10-year average of 190. New Zealand Certified Builders Mid-South Canterbury regional president Johnny Rive, owner of Ashburton-based J Rive Construction, said things are just steady. 'Ashburton seems to be ticking along regardless of what the rest of the country is doing.' He said it wasn't a boom - which are not great for anyone. 'That's when prices go up, everyone is busy, and the work quality goes down,' Rive said. 'The spot we are in now, everyone has a bit of time to do the job the way it should be done, while contractors and suppliers aren't increasing prices. 'It's a happy medium as no one is undercutting each other, so everyone is still making the profit they need to without taking the piss.' The price of land in Ashburton is a key difference, even compared to the nearby growth areas of Lincoln, Rolleston, and Christchurch, he said. 'People can't believe for $250,000 you can get 800 square metres sections in a new subdivision [in Ashburton] when they are spending at least $350,000 or more on something like that elsewhere.' There are a number of multi-section subdivisions popping up, keeping the local builders in business as the town grows, he said. And its not just Ashburton, with a large number of the new homes popping up in Methven and new subdivisions in Rakaia. Rive also said he knows there has been an influx of people moving to the district from big cities for the more affordable housing options. While Selwyn and Ashburton new builds increased, it was a different story for their neighbours. Down in Timaru, there were 139 new homes consents in 2024/25, one lower than the previous 12 months, with a 10-year average of 187.3. Timaru District Council building control manager Jayson Ellis said he believed that Timaru 'will not see any significant increase in new houses over the next 12 months when comparing to the last 2 years'. Waimakariri District Council building unit manager Aaron Haymes said the district had 659 new builds in 2024/25, down from 770 the previous year, with a 10-year average of 692.5. 'Consent numbers have been steady and all signals from the sector appear to support a continuation of construction activity in the Waimakariri District at similar levels,' Haymes said. Christchurch City Council head of planning and consents Mark Stevenson also reported a 4% drop, with the 2998 new build consents in 2024/25, down from 3124 the previous year, but both above the 10-year average of 2500. 'Annual consent numbers have varied [over the past decade], ranging from around 1,700 to 3,900 new homes. 'Assuming no significant changes in market conditions or demand for new housing in Christchurch, it is reasonable to expect that future consent levels will remain broadly in line with historical trends for additional housing,' Stevenson said. By Jonathan Leask, Local Democracy Reporter
