This article is from the Australian Property Journal archive
VOLUNTARY administrators have been appointed to real estate disruptor, The Agency, after its largest shareholder ran out of patience waiting for payments from the ASX-listed firm.
Magnolia, trading as MCL 105 Pty Ltd, appointed BDO as voluntary administrators to pursue The Agency Group (AU1) for its outstanding secured debt.
“Despite raising additional finance and offloading assets, the debt remains outstanding after repeated demands for payment,” yesterday’s Magnolia statement said.
“Magnolia has lost confidence in the board and the unknown financial position of the AU1.”
A security agreement had been entered into by Magnolia and The Agency in February last year.
BDO has been appointed as voluntary administrator over AU1 only, not over any subsidiaries, which Magnolia said will “allow for an independent review of AU1 without disrupting the trading businesses”.
Magnolia holds a circa 16.7% stake in The Agency, the largest of any shareholder. It launched a takeover bid last month for the firm at 4 cents per share, as an alternative to a funding deal struck between AU1 and Peters Investments in November that would give Peters Investments a 45% weight in voting.
The Agency shareholders earlier this month approved the proposal to issue Peters Investments with $5 million of convertible notes, allowing it to meet debt obligations to Macquarie Bank. It has extended a $5 million primary secured debt facility with Macquarie Bank until January of 2023, and repaid a loan facility from Tony Leibowitz’s Kalonda Pty Ltd.
A subsequent statement yesterday from Magnolia said the appointment of BDO “triggers further defeating conditions of Magnolia’s takeover bid”.
The Agency was set up by high-profile former McGrath agents Matt Lahood and Ben Collier. The firm attracted a number of star McGrath personnel as it made moves to expand across the country.
It only turned its first full-year EBITDA profit in the 2020 financial year, but still reported a $9.06 million loss.
