Eden Park annual report reveals ASB Bank's refusal to extend $40m loan

Thursday, 24 January 2019

The debate around Eden Park is ongoing. Residents views. First published in Sept 2018

Eden Park Trust failed in a bid to extend a $40 million loan because Auckland Council refused to further its guarantee of the credit.

Eden Park's 2018 Annual Report, released Thursday afternoon, detailed negotiations between the trust, ASB Bank and Auckland Council, which have largely taken place behind closed doors.

It also revealed a net loss of $7.3m for the last financial year.

In the report, Eden Park Trust (EPT) chairman Doug McKay declared the unresolved status of the $40m loan, which expires on September 30, the most 'pressing issue' for the stadium.

A report by accountants EY, obtained by Stuff, shows Eden Park could run up losses of nearly $80 million in the next decade.

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* War of words between Auckland Mayor, Eden Park Trust**

Auckland Council has guaranteed repayment of the loan and already has the debt on its books, anticipating it might have to pay the bank.

In May 2018, Auckland Council chief executive Stephen Town was given authority to negotiate with ASB to acquire the loan – 'together with consideration for other financial support, designed to ensure that Eden Park can 'fill the void' until the matter of a new stadium is resolved.'

Eden Park Trust chairman Doug McKay has detailed negotiations between the trust, Auckland Council and ASB Bank regarding the stadium's $40 million loan.

Accountants EY were then tasked with preparing a report on Eden Park's financials.

Stuff broke the details of that report, which showed Eden Park could run up losses of nearly $80 million in the next decade.

In the annual report, McKay writes of Eden Park's June request for an extension – 'in accordance with the terms of its loan agreement, in order to protect its position should the council not acquire the loan as proposed'.

'In September the council notified the ASB that it did not intend to extend its guarantee of the facility, without reference to acquisition of the loan,' McKay reveals.

'The bank responded immediately by advising they would not offer an extension of the facility, in light of council's decision to withdraw the guarantee.'

But Auckland Council appeared to change its tune in December, when officials proposed to extend the guarantee by six months, a move which would require councillors' approval.

'The Trust suggested instead that approval be sought for a brief Memorandum of Understanding to be entered into between EPT, council and the ASB Bank, undertaking that council take assignment of the loan upon expiry (if not before),' McKay reported.

'This proposal was not put to councillors (due to time constraints) and is therefore expected to be discussed in early 2019. Accordingly, the outcome remains uncertain.'