Australian-based private equity firm Anchorage Capital Partners ‘inspecting’ collapsed entity of real estate chain LJ Hooker

LJ Hooker has a debt pile of about $70m and senior lender is Intermediate Capital Group, owed $34m, and a fund out of Singapore controls the mezzanine debt.

Australian-based private equity firm Anchorage Capital Partners is believed to be mulling an acquisition of the collapsed real estate chain LJ Hooker.

It comes after LJ Hooker, one of the most iconic real estate agency brands in Australia, was placed into voluntary administration last month.

LJ Hooker is known to have had challenges for some time before it fell into voluntary administrator KPMG’s hands, with large debt levels and discontent said to have been building among its franchisees.

It has also been placed into receivership through an Asian pension fund lender.

The company’s owners, which include founding family member and chair, Janusz Hooker, are understood to have been planning a recapitalisation of the real estate franchise business with US billionaire and existing shareholder Michael Fuchs.

However, that could now be under threat at a time that Anchorage closes in.

The buyout fund is known for its expertise in turning around companies and most recently, it explored potential deals to buy Prime Media Group before it was in the cross hairs of the Kerry Stokes-led Seven West Media, Downer’s Spotless laundries business and telecommunications company Amaysim.

LJ Hooker has 730 franchises across Australia, New Zealand, Indonesia and PNG and was founded in 1928 by Leslie Hooker.

The business failed once before, in 1989 when it collapsed with debts of $1.7bn while in the hands of George Herscu.

It was later purchased by Suncorp.

Janusz Hooker headed a consortium that included high profile investors such as former Mirvac Group boss Greg Paramor to buy the business back from Suncorp in 2009.

The investors sold out in 2015, leaving Mr Hooker and an international backer to take control.

Janusz Hooke, the grandson of Leslie Hooker, is a former private equity operative and a bronze medal winner in rowing at the 1996 Atlanta Olympic Games.

The business was considered to have a $400m equity value when it was mooted for an initial public offering through investment bank Citi.

But the float plans were shelved after an earlier listing of rival firm McGrath Estate Agents failed to fire.

LJ Hooker has a debt pile of about $70m and senior lender is Intermediate Capital Group, owed $34m, and a fund out of Singapore controls the mezzanine debt.

It is understood that the head stock of the company, among some other entities, have been placed into voluntary administration.

However, challenges have remained for suitors assessing a potential acquisition of the business because the operational assets are not held by the entities that are being overseen by KPMG, making due diligence on the operation an impossible feat.

The companies in administration include the former holding company Empireal Ltd, as well as LJX Pty Ltd, LJX Holdings Pty Ltd, LJHRES Holdings Pty Ltd and LJH RES Ltd.

Empireal’s earnings before interest, taxation, depreciation, amortisation and the one-off charges for the 2018 financial year were about $15.01m, up from $12.66m.

But it fell to a statutory net loss before tax of about $6.19m.

It made $31.63m in franchise fees and $5.19m in marketing and promotional income.

The group refinanced in late 2017, redeeming convertible preference shares and taking on Macquarie Group as its senior lender.

Other lenders through LJX Holdings include Singapore’s Koi Structured Credit, which counts Madison Pacific Trust as its trustee.