CROMWELL DEAL FALLS THROUGH

Written on the 15 July 2010

CROMWELL DEAL FALLS THROUGH

PROPERTY funds manager Cromwell Group’s (CMW) $15 million proposal to buy an embattled funds management business has fallen through, as it was unable to reach an agreement with its banks.

Cromwell managing director Paul Weightman has withdrawn the proposal to buy the management rights to Orchard Funds Management, because major financiers would not agree to the company’s proposed term, interest rate margins and loan-to-ratio covenants.

“It’s just one of those things - you put the proposal up and if you can be happy enough to get something on your own terms, that’s great, but in this case we couldn’t,” he says.

“We would have paid $15 million for the management rights to the company, managing the funds through to the other side of their difficulties, but the fund we would have managed is worth around $1.5 billion.

“Obviously there’s a lot of history with Orchard and the fact they were in default meant we needed some debt to keep it going – we thought it was sensible but it wasn’t acceptable to the banks."

Weightman says other opportunities are out there, as Cromwell continues due diligence on the Qantas Headquarters in Sydney, while shareholders will vote today on funding for 321 Exhibition Street in Melbourne and the TGA Complex in Canberra.

“Cromwell will continue to look for opportunities in the direct property space to acquire businesses and assets that enhance the current business with a target of 80 per cent earnings from property rentals and 20 per cent from funds management," he says.

“When this happens and you don’t get your way, you just do something else."


Latest News

INTEREST IN RETAIL PROPERTY SPIKES AS INTERNATIONAL BRANDS LOOK TO ROLL OUT IN AUSTRALIA

AN influx of international retail brands into Australia over the next five years are expected to push up demand for f...

MANTRA BOASTS OF SUCCESSFUL HOTEL INTEGRATION AS NET PROFIT GROWS 15 PER CENT

MANTRA Group (ASX:MTR) CEO Bob East has praised the performance of the company's new Honolulu Hotel as it posted ...

WHITEHAVEN TRIPLES EARNINGS, PAYS DOWN DEBT AFTER COAL PRICE TURNAROUND

THE HIGH coal price has allowed Whitehaven Coal to triple earnings and pay down a large portion of its debt in the fi...

BABY BUNTING BUOYED BY CLICKS AND BRICKS PERFORMANCE

BABY Bunting has grown sales 18.1 per cent to $135.1 million in the first half of FY17, sweetened by the opening o...

Related News

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

TEST DRIVE A POST GRAD AT BOND

THERE'S only one way to really move your career into the fast lane, says Bond University, and 'test driving...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter