Without too much fuss, BOS International (Halifax Bank of Scotland (HBOS) has lent more than NZ$1.5 billion to property developers and their financiers in New Zealand and Fiji, including Strategic Finance. The Sunday Star Times has an excellent background article on the Scottish bank's exploits in New Zealand.
Developers will, however, be keeping a close eye on the shifting sands of strategy in HBOS' "Mound" headquarters in Edinburgh (pictured left). HBOS is Britain's biggest mortgage lender and is heavily exposed to the slump in the British housing market. Last month it failed to raise 4 billion pounds in fresh cash from a rights issue of new shares to existing shareholders and forced its underwriters to buy the shares.
It has also looked at selling non-core assets to raise cash and speculation has waxed and waned about whether it may sell its Australasian operations, including BankWest, its Western Australian bank.
BOS International is backing the management buyout for Strategic Finance and appears to be forcing a delayed repayment plan for investors. It has lent to the Soho Square development in Ponsonby and the Hilton Denarau resort in Fiji, both of which are projects Strategic has lent to.
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