SUNLAND SNARES MADDISON DEBT

Written on the 2 August 2013

SUNLAND SNARES MADDISON DEBT

GOLD Coast developer Sunland Group (ASX: SDG) has snared control of LM Investments’ Maddison Estate through a $24.75 million debt buyout from first mortgagee Suncorp.

Under the deal, Sunland has acquired two loans – one against the Maddison Estate at Pimpama and the other against the Waterline Estate at Redland Bay on Brisbane’s bayside.

Neither asset is connected other than through the financier Suncorp, which holds first mortgages on both development sites.

The exact value of the debt is not known, but Sunland has secured a conditional deal to pay $24.75 million for the loans.

Madisson Estate is owned by the LM Managed Performance Fund, which is now in the hands of trustees David Winterbottom and Simon Vertullo of KordaMentha, while the Waterline Estate is owned by an $8 million trust established by developer Heritage Pacific.

The deal’s immediate implication for LM investors is unclear, but Sunland is expected to progress plans for development of both estates once settlement of the conditional debt acquisition is completed.

In a statement to the stock exchange, Sunland says it plans to “appoint the necessary advisors to realise the face value of the loans that have been acquired under the securities and priority arrangements that are in place”.

Sunland managing director Sahba Abedian tells Gold Coast Business News that Sunland is “reviewing all possibilities” for the assets.

“In essence what we have acquired is the first mortgage of these assets,” Abedian says.

“As we have said we are appointing advisers to explore the next steps forward.”

Sunland is expected to continue dealing with the court-appointed trustees to the LM Managed Performance Fund as part of that process.

The KordaMentha partners could not be contacted for comment on the effect the buyout would have on investors in the fund and their hope of recovering funds.

The LM Managed Performance Fund has a debt of $249 million against the Maddison Estate which is planned for a 118ha site on Rifle Range Road.

LM promoted Maddison Estate as having an end value of $1.5 billion, which included the construction of more than 2500 homes, apartments and townhouses, as well as hotels and sporting facilities.

Should Sunland proceed with LM’s original plan for the site, it would be one of the biggest developments the company has undertaken on the Gold Coast in its 30-year history.

Meanwhile, creditors to funds manager LM Investment Management Ltd this week voted to liquidate the stricken company following a recommendation by former voluntary administrators John Park and Ginette Muller, of FTI Consulting.

Creditors appointed Park and Muller as liquidators to the company, which was founded by Peter Drake and until March this year controlled $750 million in retail funds.

Following their investigation into the affairs of the company, the liquidators have suggested that charges could be laid against LMIM’s directors.

The potential charges identified have not been specified by the liquidators.


Latest News

BELLAMY'S FINDS EXPORTING BABY FORMULA INTO CHINA IS NO CHILD'S PLAY

BELLAMY'S (ASX: BAL) shares have suffered a 40 per cent drop in value today after the company hit a regulatory...

BRISBANE WATCH BRAND ADINA AIMS FOR ICONIC

ADINA watches is at a turning point in its history, 45 years after being founded by Robert 'Bob' Menzies i...

WHY YOU SHOULD CARE FOR YOUR BODY AS MUCH AS YOUR BUSINESS

ENTREPRENEURSHIP is a busy business. It can be all-consuming, but it is important not to neglect your health Y...

BULLETS BACK IN THE BUSINESS COMMUNITY

ALTHOUGH new to the current south-east Queensland sporting landscape, the Brisbane Bullets have a rich basketball ...

Related News

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

BIG W CEO QUITS AFTER 11 MONTHS

SALLY MacDonald has resigned as chief executive of BIG W ending her tenure at the helm of the struggling discount ...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter