Packer bites a $22m bullet on Nobu deal

Illustration: Rod Clement

Crown Resorts has written down the value of its investment in the Nobu restaurant chain by $21.7m to $121.2m.

The investment has been something of a bugbear ever since the James Packer casino giant forked out $141m in 2015 for its 20 per cent stake.

The investment was announced by then chairman Rob Rankin just days after Packer and Nobu’s most high-profile co-owner, Robert De Niro, opened the $4bn Studio City casino in Macau where the Hollywood actor starred in a 15-minute promotional film for the resort.

Some saw it as a trophy investment done on a whim by Packer at the height of his wild times in Hollywood.

Since then, some analysts have claimed it was worth nothing on Crown’s balance sheet.

Now, courtesy of Crown’s ­latest accounts, we know the ­casino giant reckons the recoverable amount in the Nobu Hospitality Group is $121.2m.

The indicators of impairment were considered in the re-­forecast of cashflows of Nobu, Crown told the stock exchange on Wednesday.

It was reported late last year that Nobu — which now includes eight hotels and more than 40 restaurants around the world — had been expected to earn $1bn in revenue by 2023. But given COVID-19, we’d bet Crown, Packer and De Niro might now be waiting a while longer to crack that milestone.

There have been Nobu restaurants in Crown Melbourne since 2007, and Crown Perth followed in 2011 — with one coming soon to Crown One Barangaroo in Sydney.

Robert de Niro and James Packer at the Nobu launch in 2007.

While Crown’s stake was acquired in 2015, their relationship dates back a decade earlier when gourmand and then PBL chief John Alexander sounded out Nobu to open at Crown Melbourne to serve up its popular yellowtail sashimi with jalapeno.

Challenging email

The staff at financial services company Challenger Group were in for a thankfully short-lived shock earlier this week. An email intended for testing distribution purposes went a little further than envisaged. Challenger sent an email with the subject line EXIT SURVEY to an “all staff” distribution list.

The omnipresent exit survey was designed by Willis Towers Watson for the Richard Howes-led Challenger, which is recognised as being retirement income specialists.

“We were testing a new system and inadvertently sent an email to all employees,” a company spokesman advised Margin Call.

“It was an error and did not relate to any other business activity.”

Margin Call gleans there are no plans to do anything outside normal business operations at their HQ, which is in the iconic money box building on Martin Place.

Pizza the action

Don Meij, the one-time delivery driver presiding over another Domino Pizza’s revival, has recently splashed out on a slice of the Gold Coast’s beachfront lifestyle.

The entrepreneurial 51-year-old has bought a full-floor Main Beach apartment for $5.35m. The Domino’s chief executive retains a $7.5m abode at Brisbane’s Hamilton.

With the shares trading at just over $83, the stock has jumped by about 75 per cent since mid-March, as the pandemic triggered a boost in home delivery orders to locked down consumers. Sales rose 12 per cent to $3.3bn, underpinned by a 21 per cent rise in online sales through some 2668 outlets. And Meij reckons there will be 5550 stories by 2033.

He worked while studying as a Silvio’s Dial-a-Pizza driver at Redcliffe in the late 1980s, and after Silvio’s bought Domino’s in 1993 helped built the vast international network.

Liquidator ousted

Jirsch Sutherland’s Malcolm Howell has lost his job as liquidator of AFX Group, the property group headed by flamboyant property developer Richard Gu.

His replacement by undertakers from Grant Thornton followed an application by Qi Liang Gu, who is a major creditor and also the father of Richard.

Howell had aggressively gone after $200m in assets, including obtaining freezing orders in respect of family trust assets. Howell reckons he was faced with “very powerful related parties”.

The trust assets, some of which have been alternatively repossessed by NAB and other lenders, included a $2.5m 26m luxury motor yacht named Fat Fish. The fleet of Gu’s motor vehicles included a Maserati, a Bentley, a Ferrari, five Mercedes-Benz cars and a Land Rover.

One item that remains unrecovered is a Patek Phillipe Nautilus wristwatch allegedly accepted as part of a $1m-plus deposit on a $4.5m East Melbourne apartment sale. Howell’s May report to creditors revealed that Gu Jr allegedly sold the watch for $70,000 and treated the proceeds as director’s fees.

The watch’s realisable second-hand value has been put higher. Howell told creditors that he had reported the director’s conduct in respect of the watch to ASIC.

“Usually, creditors would welcome the steps I have undertaken in the liquidation of AXF Group,” Howell told the Victorian Supreme Court Justice Peter Almond when the disputed administration recently went before the court. His honour noted proofs of debt lodged by Gu Junior’s father and his mother Wanli Zhang totalling some $96m. The ATO is claiming $12.8m. The total unsecured creditor claims are put at $182m.

Given the recently appointed Grant Thornton team are not in funds as yet, Peter Gosnell’s Insolvency News website indicated minority creditors will have to wait to see how the vexed liquidation is pursued, given the influence sought to be wielded by the closely related creditors.

Meanwhile, there’s a separate court battle over the apartment that has been occupied for the past two years by James Kennedy, chair of the retailer Kennedy Luxury Group.

He has lodged caveats on the 150 Clarendon Street apartment, claiming there was a 2018 delayed settlement sales contract. While it remained in the name of AXF, Kennedy went ahead with $400,000 renovations.

Happy as Harry

The Fair Work dispute between former lawyer for Meriton Property Services Joseph Callaghan and billionaire Harry Triguboff has been settled out of court. The company’s former group general counsel was claiming he was fired from his $350,000 job because he refused a request by the 87-year-old property developer. Seems there had been a “misunderstanding” between the parties, with both sides expressing gratitude to each other.

The R&D blues

Tech unicorn Atlassian has made a belated appeal to the federal government to keep the current Research & Development Tax Incentive (RDTI) scheme intact.

Atlassian’s co-founder Scott Farquhar, and his head of policy and government affairs Patrick Zhang, stressed government support for R&D was more important than ever to Australia’s post-COVID-19 economic recovery.

Atlassian lobbed its submission to the Senate Economic Legislation Committee, led by Senator Slade Brockman, weeks after the committee had been scheduled to report back to the parliament on the proposal.

The committee is now due to report August 24.

“We cannot support the bill as it is currently drafted,” the Nasdaq-listed Atlassian’s boss said.

The bill introduces a refund cap of $4m and creates a tiered system for the incentive.

Unveiled in the 2018 budget, the government scheme has been criticised as it intends to implement changes retrospectively. The Australian Taxation Office confirmed recently that businesses accessing offsets before the legislation is finalised may have to make repayments later.