Can Public Hospitality Group’s Jon Adgemis strike a deal to refinance $500m of debt attracting interest of up to 18pc?

Struggling to repay your mortgage at 7 per cent? Got a few thousand on the credit card? At least you’re not Jon Adgemis, who is battling to refinance $500m on his own debt — some of which is attracting 18 per cent interest.

The Empire Hotel in Annandale is a part of Sydney pub-owner Jon Adgemis’ Public Hospitality Group.

Sydney’s Jon Adgemis was once the king of mergers and acquisitions at KPMG, but now the playboy pub-owner is racing to do a deal for himself – refinance $500 million of debt attracting interest rates as steep as 18 per cent.

Under the umbrella of his Public Hospitality Group, Mr Adgemis has been building a portfolio of unloved inner-city and eastern suburbs hotels, with the goal of increasing their value by upgrading the quality of food and accommodation.

And, for a long time, financiers were happy to extend credit for a strategy that looked good on paper.

While growing his empire, Cranbrook-educated Mr Adgemis also came to have many of the objects often associated with success in Sydney – a model girlfriend (Cheyenne Tozzi, although they are no longer together), a massive boat (Hiilani, once owned by Shirley Temple) and a harbourside mansion (he rents a Point Piper pile that traded for $33.5m in 2013).

But Public is now teetering. The group is deep in debt and paying credit-card-like interest rates. To make matters worse, renovation bills have been bigger than expected.

Jon Adgemis is trying to save his property empire. Picture: NCA NewsWire / David Swift

Consequently, several high-profile venues have yet to reopen, exacerbating the cashflow crunch.

Mr Adgemis’s biggest buy was in 2022 when he bought the famed Noah’s Backpackers at Bondi for $68 million.

Jon Adgemis with Cheyenne Tozzi at the Melbourne Cup in 2016. Picture: David Geraghty

To get the Campbell Parade icon, he outbid big names like chicken heir Robby Ingham and property developer George Karageorge.

The venue was due to open in the first half of 2023, with accommodation and hospitality. But it remains closed.

Other properties Mr Adgemis has purchased that are yet to reopen include Balmain’s Town Hall Hotel and The Kurrajong Hotel at Erskineville.

Late last year, Mr Adgemis’ Public was set to unlock the doors of Annandale’s Empire Hotel, renamed The Federal, with top-flight contractors Love Tilly Group to run another Fabbrica Pasta Bar in the venue, joining the one at the Public-owned The Exchange Hotel in Balmain.

However, just weeks before The Federal was due to commence operations, Love Tilly suddenly cut ties with Public, with managing director Matthew Swieboda saying, “for the benefit of the staff and the suppliers, we can no longer, in good faith, continue to run our venues with Public Hospitality.”

At the time, Public responded to Love Tilly by saying “while there have been disputed commercial matters, Public understood these to be progressing. Public thank Love Tilly Group for their contribution and wish them well in future endeavours.”

Recently one lender took action to get paid, by having a receiver appointed to the Adgemis company The Yacht Pty Ltd, which holds Hiilani. It’s understood the action achieved the desired effect and the receivership came to end.

Noah's Backpackers, which Public bought for $68m.

However it remains to be seen if Mr Adgemis can recover from the blow he suffered last weekend, when private equity firm Bain Capital pulled out of a plan to refinance Public’s half-billion-dollar debt.

Bain, which bought failed airline Virgin Australia and later sold out at a huge profit, on Sunday said Public had “not complied with the terms of the agreement, so the agreement is now at an end.”

A Public spokeswoman this week said it was working on a debt “reset”.

“The reset will position Public to continue the development of its portfolio of high-quality accommodation and hospitality sites across Sydney and Melbourne,” she said.

“While the terms of the reset are being finalised, Public remains in close contact with its suppliers and employees and thanks them for their continued support.”

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