The assets of the loss-making Oamaru Licensing Trust should be sold, the money invested and interest it earns paid out in grants, the Waitaki Ratepayers and Concerned Citizens Association believes.
The ratepayers group has been taking an active interest in the affairs of the trust since it announced a $511,607 loss for the 2009-10 financial year.
Association chairman Warren Crawford said yesterday the issue was discussed at a recent meeting and it was decided the assets of the trust should be sold and the trust become similar to the Community Trust of Otago, investing the proceeds and using the income to make grants.
If that does not happen, the ratepayers group fears the trust will become insolvent and be placed in receivership, and the community will lose the assets it has built up since the trust was established in 1961.
The trust's financial statement to March 31 this year lists its total assets at about $9 million. Total liabilities, which include loans, are $5.164 million. However, the assets will be at book value, not market value in the present economic recession. Liabilities include $3.6 million in loans due for full repayment in July, unless the bank agrees to renew them.
"While the community still has those assets, they should be sold, the capital left invested and interest income distributed to the community," Mr Crawford said.
He did not believe the assets could be saved, because of ongoing losses by the trust in the past and forecast. He emphasised the ratepayers group was not proposing a "fire sale" of assets, but a controlled sale to maximise prices.
The trust owns the Kingsgate Brydone Hotel, Fahrenheit Bar, Northstar motel-restaurant-bar complex and the Oast House liquor outlet. It spent more than $3 million redeveloping the Northstar in 2009.
PricewaterhouseCoopers has been commissioned by the trust to carry out a strategic review of its operations.
