This article is from the Australian Property Journal archive
AUSTRALIAN property investment company REMI Capital has called in voluntary administrators as 450 investors are left exposed to $70 million in unpaid debt whilst Queensland home builder Pivotal Homes has also collapsed.
The privately owned independent boutique investment company, entered voluntary administration on Wednesday following weeks of modelling to address the monetary woes ahead of going public.
“REMI apologises for any lack of communication in recent weeks. We ask you rely on any reports to creditors and not rely on any speculation you may hear,” said Mark Prestige, managing partner, in a company email to REMI staff, investors and shareholders.
“REMI had been advised by external legal counsel not to communicate over recent weeks until the modelling was complete that allowed this difficult decision to be made.”
The company, which is weighted towards boutique property developments, healthcare assets and operations sectors was founded in 2016 by Peter Terrill as C2 Capital, starting out in Melbourne before expanding with an office in Brisbane.
Its property portfolio included a 3.73 hectares Tarneit site it acquired for $9 million with intentions for a mixed-use development; a 24.6 hectares site in Rockbank it acquired for $30 million, with plans for a Major Activity Centre; a mixed-use shopping centre development in Sunshine with two residential towers comprising 176 residential units; a commercial project in Pakenham; 59 office warehouse units in Laverton and medical centre and health precinct in Sunbury.
REMI had operated with an emphasis on making “responsibly and ethically managed investments” on behalf of its shareholders, with multiple mixed-use assets under management across Victoria, including its most significant undertaking, the Rockbank town centre development.
A likely outcome from entering voluntary administration may be a Deed of Company Agreement (DoCA), which would look to best enable REMI to continue operations, to ensure ample returns to creditors.
“This process will allow a DoCA to be proposed by the board by the second meeting of creditors. Based on current modelling, a DoCA will result a better return to all creditors rather than the alternative course of liquidation where the outcome does not look positive,” said Prestige.
A creditors meeting in currently scheduled to go ahead on June 6.
“We are undertaking an urgent financial assessment and working closely with the directors to try to find a solution and provide the best outcome for investors and creditors,” said Chris Baskerville from Jirsch Sutherland who has been appointed as voluntary administrator.
REMI’s collapse follows that of construction giant Probuild, which was left to administrators Deloitte after its parent company Wilson Bayly Holmes-Ovcon withdrew financial backing.
“Remi is committed to continue working with the administrator and creditors and for favourable consideration when the detailed DOCA proposal is submitted,” concluded Prestige.
At the same time, Queensland home builder Pivotal Homes has gone into liquidation with more than 200 customers impacted.
Managing director Michael Irwin blamed rising labour and construction costs for the company’s collapse.
“In my 30 years’ experience I have never seen a set of circumstances like this and obviously we are not alone in these unfortunate conditions facing the industry,” he told the Courier Mail.
“We are absolutely devastated for our 16 Pivotal Homes employees and assure all creditors, contractors and subcontractors have been paid in full.
“All purchasers are in a net gain position, meaning the work they have paid for has been completed. In fact, they have had more work completed on their homes than they have paid for.” Irwin said.
Meanwhile, Metricon last week confirmed that reports of its demise had been greatly exaggerated, with rumours that the group was on the brink just days after the sudden death of its founder and chief executive Mario Biasin.
