This article is from the Australian Property Journal archive
REAL estate disruptor The Agency has temporarily halted Magnolia’s move to put the company in the hands of administrators, accusing its major shareholder of “destabilising” the company.
Magnolia, trading as MCL 105 Pty Ltd, appointed BDO as voluntary administrators to pursue The Agency Group (AU1) over a $385,000 debt, which The Agency described as an “alleged and disputed ‘debt’… which relates to alleged fees on a mandate entered into for the purpose of securing debt funding under which MCL 105 Pty Ltd was unable to deliver any funding at all.”
MCL 105 Pty Ltd is controlled by former director of The Agency, Mitchell Atkins.
“This morning the federal court ordered that the purported appointments would have no effect (other than in relation to various technical matters) pending the determination of the proceedings or other order and control of The Agency remains in the hands of the directors,” The Agency said in an ASX statement.
“The company’s position is that the alleged appointment by MCL 105 Pty Ltd was undertaken for the purpose of destabilising the Agency and compelling the Company to pay a disputed fee.
“The Agency is in a strong financial position and the recent AGM results demonstrate the overwhelming support for the Board’s strategy to continue to drive shareholder value.”
The court ordered the administration would end at 4pm on February 1. A hearing has been scheduled for 12.15pm AEDT that day “for the purpose of allowing an opportunity for any creditor or other sufficiently interested party to apply to discharge or vary the orders ending the purported administration”.
“The company looks forward to shortly releasing its half yearly unaudited accounts, which will show record numbers across key financial metrics,” The Agency said.
Magnolia is the largest shareholder in Perth-based The Agency, with a circa 16.7% stake. It launched a takeover bid last month for the firm at 4 cents per share, as an alternative to a funding deal struck between The Agency and Peters Investments that would give Peters Investments a 45% weight in voting.
Earlier this month, shareholders of The Agency approved the proposal to issue Peters Investments with $5 million of convertible notes, allowing The Agency to meet debt obligations to Macquarie Bank – a sticking point for the group. 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, and attracted a number of star McGrath personnel as it looked to expand nationwide.
It turned its first full-year EBITDA profit in the 2020 financial year, but still reported a $9.06 million loss.
