Angas Securities swoops on Bondi building after rejecting debt deal from Jon Adgemis

The $25m Bondi beachfront property could be sold off rather than redeveloped by Sydney deal-maker Jon Adgemis for hospitality empire, as lenders call time on debt deals.

Noah’s Backpackers on Campbell Parade in Bondi Beach.

Lenders have seized control of a $25m Bondi beachfront property held by Sydney deal-maker Jon Adgemis, but the pub baron insists the debt upset is not set to stop a mooted rescue deal for his Public Hospitality Group.

Adelaide-based lenders Angas Securities stepped in on Friday to seize the apartment building on Campbell Parade, next to the controversial Noah’s Backpackers site, with plans to sell the four level site rather than accept a debt deal offered by Mr Adgemis’ backers.

Angas Securities had extended some of the almost $15.5m in debt attached to the block, with a further $3m in junior debt hanging over the building, which Mr Adgemis snapped up in his foray into Bondi after buying the mammoth Noah’s Backpackers block in a $68m deal two years ago.

The loan matured in December.

Industry sources said Angas Securities was offered almost $13.5m for its debt on the Campbell Parade building, which would have seen the group recoup its initial financing minus interest.

Noah’s is one of 22 venues controlled by Mr Adgemis’ pub and hotel operation Public, but the adjacent Campbell Street block was not one of the group’s operating entities and is instead controlled by a special purpose vehicle linked to the pub baron.

A spokesman for Public said the loss of the property would not stop a “debt reset” for his pub group, with negotiations underway between lenders to the group in a $500m loans roll-up.

“This is not a PHG property, and it will not impact the debt reset,” he said.

“Those discussions with existing lenders are progressing well and happening in an orderly manner.”

The Campbell Parade building is untenanted.

Forbes Global Properties agent Ken Jacobs said there were plans to take the six apartment holding to auction on May 21, but noted the campaign was still in its early stage.

The move to seize the block from Mr Adgemis comes as lenders look to firm up a debt deal for Public, which is facing a cash crunch as the debt burden on the group has ballooned amid a tightening of credit markets.

Public, which boasts 17 operational venues, is looking to complete the rebuilds of six separate venues.

Ex-banker Jon Adgemis. Picture: David Swift/NCA NewsWire

The pub and hotel operation is also seeking to navigate a debt roll-up that would see Public’s sprawling list of lenders cross-collateralise their loans across the group.

This may see some lenders exit, while others increase their stake.

Lenders Deutsche Bank are expected to be the kingmakers in any deal, alongside Sydney private credit provider Gemi Investments, both of which hold a hefty slice of Public’s almost $500m debt pile.

This sees Public paying an average 12 per cent interest bill on its debt pile, with painful mezzanine financing of circa 18 per cent a target for any potential refinancing.

The latest manoeuvres come after a mooted refinancing from private equity players Bain Capital fell over, after the group failed to force Mr Adgemis to pay more than $2.5m upfront ahead of a due diligence process.

This leaves Mr Adgemis to navigate lenders including Deutsche Bank, Gemi, Belgravia Group, Byblos Corporation, Millbrook, Alex Waislitz’s Thorney Investment Group and Lance Rosenberg’s Gleneagle.

Gemi has publicly backed Mr Adgemis’ moves, while others have pushed back on cold calls from KordaMentha receivers, who questioned if they wished to tip parts of the Public Group into administration.

Mr Adgemis moved in recent days to put up the Empire Hotel in Annandale, one of Public’s venues, for sale last week after buying the pub for $20m in late 2021.

Sources said the pub, valued at circa $40m, was carrying almost $34m in debt.

Angas Securities, an Adelaide-based lender, is a small private debt operation specialising in financing property.

The group’s main debenture funds were restructured in 2017 despite concerns raised by the Trust Co about its plans to draw out repayments to investors and called for receivers to oversee attempts to return the $135m owed.