Nelson College must sell assets to pay off nearly $ 3 million in debt – principal
The country’s oldest public school, Nelson College, is at risk of insolvency unless it can convince the government to speed up the sale of some of its assets.
The school owes nearly $ 3 million, most of it for the redevelopment of its boarding schools several years ago.
Nelson College principal Richard Dykes told RNZ the school had identified assets it could sell, including old classrooms, land and one of its three boarding houses.
However, he said the Education Ministry told the school it could take several years to make sales.
Dykes said it was too long, as the school’s debt is expected to reach around $ 3.5 million in the first semester of 2022, exceeding the school’s credit limit.
“We are working really positively with the minister and the ministry. However, at this point, they indicate that it could be several years before we can dispose of these assets. This creates a problem as our immediate need is now, our debt is immediate, this asset could be in the years and we do not have the luxury of time, “he said.
“We are already in debt, we have a credit limit, we will hit our credit limit next year.”
The school’s debt stems from the renovation of two of its boarding schools between 2015 and 2018.
The work was based on the hope that the school would have 190 boarders per year, but those numbers did not materialize.
In 2019, the school borrowed $ 2 million from its bank as well as an overdraft of up to $ 1.5 million. At the end of June of this year, her debt stood at $ 2.9 million.
Dykes said the pandemic has exacerbated the situation by reducing the income of international students last year and this year.
He said the school was confident it could pay off its debt through the sale of assets. He had also cut costs and looked for new ways to make money.