Kooralbyn Resort: owners appear fresh out of options
ASSET Resolution Ltd declared in 2013 that the Kooralbyn resort was its most difficult assignment. The sale of the resort doesn’t appear to have eased that “difficulty”.
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ASSET Resolution Ltd, which was set up to sell assets of failed Gold Coast company MFS/Octaviar’s Premium Income Fund, declared in 2013 that the Kooralbyn resort was its most difficult assignment.
Last year’s sale of the resort, which has been closed since 2008, doesn’t appear to have eased that “difficulty”.
The buyer, Brisbane real estate agency principal Peter Huang, has been having difficulty paying for the sprawling property.
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Asset Resolution, to make the resort’s sale to Huang’s company JHC happen, agreed to lend him $4.933 million of the $6.5 million purchase price.
The money was to be repaid by September 2 last year but earlier his month, Asset Resolution was still waiting for $1.26 million.
That’s despite “a strict debt reduction plan” that ended in April and notices of default being served on the Huang camp.
Asset Resolution, while professing that it is confident of receiving its money, has indicated to its mum and dad shareholders that it might take the Kooralbyn resort back and resell it. Unfortunately, were repossession to take place, Asset wouldn’t be getting back all that it sold.
Huang, the boss of Yong Real Estate, has sold off property that includes the lower campus of the resort’s international school and a development site, and appears to have used the money to chip away at the Asset loan.
It is likely that Asset Resolution would be reluctant to regain control of the resort — the property was the subject of a number of failed contracts before the Huang deal was cemented.
Even the Huang sale was not smooth. The unspecified original settlement date on the unconditional contract was extended to June 2, 2014, Asset shareholders were told in November.
“The purchaser was unable to settle and, rather than lose the sale, ARL (Asset Resolution) provided vendor finance of $4.993 million for a three-month term and holds various securities, including a registered first mortgage over Kooralbyn Resort,” said Asset in a sale update.
A number of extensions have been granted since and a default interest rate of 20 per cent took effect in April.
Shareholders in Asset were told 11 days ago that, if the outstanding Kooralbyn loan money was not repaid by June 22, they would miss out on part of a 1¢ a share capital return.
In the meantime, Huang has been brimming with confidence, having signed up Ramada to run the 100-room Kooralbyn hotel and announced a $10 million revamp of the 30-year-old resort.
The directors of Asset Resolution, who include former federal minister David Beddall, are resisting a 1¢ a share takeover bid from Hamilton Securities.
Asset says the shares are worth 2.03¢ each.
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