This article is from the Australian Property Journal archive
Australian Capital Reserve investors received some encouraging news yesterday.
Administrators McGrathNicol’s Murray Smith said yesterday, “It appears that the secured lenders to each of the various developments are well secured and therefore it is our expectation that there will be significant proceeds ultimately available for other creditors, including noteholders,”
Smith said that it was too early to provide estimates of timings or the ultimate returns to creditors. However, the companies related to ACR control significant property holdings – some of which are at advanced stages of completion.
ACR’s main institutional lenders are Investec, Capital Finance and the Commonwealth Bank.
Slater & Gordon lawyer Ben Whitwell said the statements appeared to imply that the secure lenders may have been mainly paid out and it might infer that unsecured noteholders – mums and dads and retiree investors – may receive a greater return from proceeds following the sale of assets.
ACR is the fund-raising arm of Estate Property Group. In Sydney, ACR is believed to owe approximately $11 million for a Gosford apartment complex, $35 million for two sites in Parramatta and $33 million for an apartment development in Wahroonga.
In Melbourne, ACR owns a 41 level apartment building on Spencer Street and a 14-level level development on Queens Road in Albert Park.
Meanwhile Smith said the administrators are conducting an urgent review of each of ACR’s 21 property developments to enable a strategy to be developed that will result in maximising the return to all creditors, including noteholders, secured lenders and other unsecured creditors.
“The Voluntary Administrators are working on a range of potential solutions and would recommend a strategy to provide an holistic solution to deal with all the developments within the group and that would allow for the ongoing support of secured lenders to maximise the value of the developments,” Smith said. “Successful implementation of our strategy will ensure that the best result can be achieved for all creditors.”
Whitwell said the property developments held by ACR appear to be in advanced stages of development.
“They (McGrathNicol) might take the approach that KordaMentha took with Fincorp, and complete the developments and then sell the assets. They will realise more value through a finished development rather than offload a near finish project,” he added.
The first meeting of creditors for all of the companies in the group is confirmed for Monday June 04, 2007.
Australian Property Journal
