Paradise Resort, site of future Ruby towers, likely to be sold to recoup $500m Ralan Group debts

Paradise Resort is likely to be sold off as administrators of failed Ralan Group try to salvage half a billion dollars owed to its creditors. However those hoping a sale will see their money returned or their jobs secured may be disappointed.

Sydney-based developer Ralan Group has collapsed, potentially leaving hundreds of people out of work. Exterior view of the Paradise Resort in Surfers Paradise. Picture: Jerad Williams

PARADISE Resort is likely to be sold off as administrators of failed developer Ralan Group try to salvage what they can of the half-billion dollars owed to its creditors.

However, most creditors hoping for their money back will have to line up behind major private lenders, who have registered mortgages over the valuable Surfers Paradise property.

Developer William O’Dwyer’s Ralan Group went into administration late on Tuesday, putting future development of five Surfers Paradise towers at risk and risking the jobs of more than 200 Gold Coast resort staff.

Administrators Said Jahani, Graham Killer and Philip Campbell-Wilson of Grant Thornton have been appointed to the group’s 58 companies, which include its developments, hotel, retail and hospitality operations on the Gold Coast and in Sydney.

RUBY BUYERS LIKELY TO LOSE THEIR DEPOSITS

CONTRACTS CRASHING AS VALUATIONS FALL SHORT

Sydney-based developer Ralan Group has collapsed, potentially leaving hundreds of people out of work. Exterior view of the Ruby Collection and Paradise Resort in Surfers Paradise. Picture: Jerad Williams

Melbourne financier Wingate, an active lender in Gold Coast high-rise development, loaned $36 million to the first stage of Ralan Group’s Ruby development, and are understood to have also tipped in for future stages.

Wingate holds a second priority mortgage over the Paradise Resort property, which Ralan picked up for $75 million in 2015, with a first priority mortgage held by a subsidiary of unlisted public company Balmain NB.

Other secured creditors named by administrators include the Australian Tax Office, Westpac subsidiary St George and National Australia Bank.

William O'Dwyer, Managing Director, Ralan Group speaks at the sod turning ceremony for Ralan Group's $1 Billion project 'Ruby' at Surfers Paradise, Gold Coast. Picture: Regi Varghese

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Most of the 1189 off-the-plan buyers in Ralan’s future Surfers Paradise towers and its Sydney development have been told their 10 per cent deposits are unsecured and may not be returned.

The majority of buyers signed unorthodox side agreements granting Ralan use of the deposits, which administrators believe have already been spent on expenses of the failed company, including interest payments to secured lenders.

Administrators have told purchasers of future Ruby and Sapphire apartments there was no guarantee a buyer of the property would go ahead with the planned demolition of the resort and progress the development.

The future also remains uncertain for the resort’s staff.

Wingate put up $34 million to enable building to resume on Avani tower The Beach at Broadbeach in 2016.

Its later investment at Ruby appeared risk free after a touted sellout of the first tower in 2015, however property records have revealed one in five of the apartments failed to settle.

The Bulletin has contacted Wingate for a response.

The first meeting of Ralan Group creditors is due to be held at the Wesley Conference Centre in Sydney at 3.30pm next Friday.