Couran Cove Island Resort sells for a buck

A four-star resort on a beautiful southeast Queensland island has sold for a buck but it’s not the bargain of the century that it appears at first glance.

IT’S been revealed the new owners of Couran Cove Island Resort picked up the four-star holiday destination on South Stradbroke Island for a mere buck.

That detail is contained in a report to creditors of failed ASX-listed Onterran which owned the resort before selling it to EDG Capital, a boutique Sydney property and investment group earlier this year.

But before you get too excited about the bargain price, the deal also involved EDG Capital and a related entity called WN Developments taking on $17 million worth of debt owed by Couran Cove Island Resorts Pty Ltd and its various subsidiaries.

Liquidator David Clout, of David Clout and Associates, told creditors that Onterran, which also ran the failed construction companies Bloomer and McGrath Homes, purchased the resort and various assets for about $11 million.

Couran Cove Island Resort on South Stradbroke Island.

It had planned to expand the resort by developing vacant adjacent land using its construction companies Bloomer and McGrath. But the failure of both those companies in 2017 put significant pressure on the financial resources of the company.

“It left the company undercapitalised and without in-house construction expertise to develop the Couran Cove asset at a low cost,” he said.

The expense of operating the resort’s own water, sewerage and electricity services also weighed on finances and the underlying business was cash flow negative.

Onterran, which ended up owing unsecured creditors almost $20 million, is now the subject of a deed of company arrangement approved by creditors last month under which they should receive 29 cents in the dollar. Priority creditors should receive back all monies owed. This week in a post-script to the drama, Rodgers Reidy liquidator David Hambleton was appointed to wind up Couran Cove Island Resorts Pty Ltd, now called Island Resolution.

Hambleton says he is waiting for more information about the sale of assets of the company. Meanwhile the new owners of Couran Cove say they have “a vibrant plan” to upgrade and further develop the South Stradbroke Island property.

DON’S PARTY

DON Hamson and his $5.2 billion Plato Investment Management fund have had a good year partly helped by the pre-election scare over franking credits. Hamson, who was in Brisbane this week to talk to investors, says returns were boosted by companies such as Flight Centre, Woodside and Wesfarmers giving out special dividends to shareholders to avoid Labor’s planned crackdown on franking credits.

Don Hamson sees value in mining stocks.

“It has been a ridiculous year with all these buybacks and special dividends,” says Hamson. Hamson, who grew up on his parents’ Sunshine Coast pineapple farm where his dad taught him the value of investing in shares, says low interest rates meant investors were searching for good returns in equities but he sounded a warning about what he calls “dividend trap” stocks.

He says these are stocks that trade on high historic yields, but subsequently cut their dividends. He points to AMP, which recently announced it would not pay a first-half dividend, as one example. Hamson likes the big mining stocks BHP, Rio Tinto and Fortescue which are set to take advantage of rising demand from China for high quality iron ore.

While in Brisbane, Hanson visited his old alma mater, the University of Queensland, where he is sponsoring a business scholarship to encourage more women to enter the investment and fund management business. “The penny dropped for me last year when I attended an investment conference and of the 50 people in the room only two were women,” he says.

IN THE CAN

THEY get through a hell of a lot of drinks at the Brisbane Convention & Exhibition Centre (BCEC) so it’s good to see the empty containers are not ending up at the dump.

The centre has recycled 128,741 items from various events including the recent Brisbane Truck Show attended by 36,000 patrons as part of its involvement in Queensland’s Containers for Change scheme. So the centre has raised $8000, which will be donated to South Brisbane based charity Common Ground Queensland, which provides supportive housing for the homeless.

The Brisbane Truck Show at the convention centre attacted 36,000 people this year.

MATT AND THE MYSTIC

CRICKETING legend Matt Hayden and Indian mystic Sadhguru seem an unlikely couple. But more than 1500 people will attend the Brisbane Convention and Exhibition Centre on Thursday evening to see a conversation between the pair. Sadhguru is regularly ranked one of the 50 most influential people in India – no mean feat in a population of more than 1.3 billion.

Australian cricket legend Matt Hayden.

He advises the corporate, non-profit and government sectors on topics that include the intersection between spirituality and science and the alleviation of poverty. Hayden is no stranger to India, having developed a passion for the country during his international career, which even saw him play in the Indian Premier League.