Large Vancouver real estate developer filed for bankruptcy protection over $700 million in debt
A real estate developer with several large properties in Vancouver is filing for bankruptcy protection, citing approximately $700 million in outstanding debt.
Coromandel Properties Ltd. filed a petition with the BC Supreme Court asking for more time to seek equity from existing or new partners.
In a statement to CBC News, the company confirmed that it recently filed a request for relief under the Companies Creditors Arrangement Act (CCAA), which was created for commercial firms to help them restructure after bankruptcy.
“If the court grants his request for protection, Coromandel will work to restructure its finances and move forward with its operations,” the statement said.
According to the petition, the company has interests in 16 real estate projects in Vancouver. The company’s website highlights two characteristics.
Frame, a 10-story development on Kingsway, has 219 units, some of which have sold, but development financing was halted after pre-sale requirements were not met, the petition said.
Construction at Oak West 52, near Oak Street and West 52nd Avenue, is 60 percent complete. It consists of 23 townhouses, 22 of which have been sold, the petition said.
Development process “complex, expensive and slow”
According to the petition, eight lenders have issued notices of default and drawn down their loans.
The company is said to be struggling to service debt as interest rates rise. It also cites the city’s real estate development process, which is described as “complex, expensive and slow”.
“The pace of development of the various projects was slower than expected due to the lengthy application process and discussions with the city about the potential for densification and the requirements for social housing,” it says.
“Accordingly, there were significant delays in the completion of projects, which led to a drop in sales.”
The petition further states that the developers “have not had sufficient cash flow to complete development of the projects, have been unable to refinance their existing debt and liabilities, or sell assets at prices sufficient to avoid loss of…property.” is in danger.”
The petition says that without CCAA protection, Coromandel will not be able to consider a reorganization “and may be forced to liquidate its assets on a fire sale basis.”
