Residential developer Port Bouvard has been given a lifeline by St George Bank which has approved funding for another five months, despite property writedowns that have resulted in the company breaching its banking covenant.
St George has approved the reassignment of $2 million in unused company facilities to apply to Port Bouvard’s working capital.
The company said the reassignment should provide sufficient working capital to the end of October 2012.
The bank also completed a revaluation of Port Bouvard’s properties, the largest of which is the Oceanique apartments south of Manduarh.
As a result of the revaluation, the company’s loan-to-value ratio was greater than allowed under its banking covenant.
However the bank has agreed to waive the technical breach of the covenant.
Meanwhile, Port Bouvard chairman Lee Verios retired yesterday at the end of the monthly board meeting.
The board plans to replace Mr Verios with an independent director, and appoint an additional independent director, which if successful will bring the number of directors to five.
The news comes nearly a month after the company received final environmental approval from the federal government for its Point Grey 3,000-lot master-planned community near Mandurah.
Port Bouvard plans to start the project in 2013.
It reported an interim loss of $15.7 million for the first half of the financial year, driven down by a $19.2 million impairment charge on the Oceanique apartments.
Port Bouvard shares held steady at 1.8c each in afternoon trade