Pub baron Jon Adgemis confirms ‘debt reset’ negotiations after Bain

Jon Adgemis’ Public Hospitality Group has confirmed it’s working on a new debt deal with lenders in a bid to right its operations.

Pictured at The Oxford Hotel is Jon Adgemis, Vince Lombardo, Stefano Catino and Martin Hudak. They have announced that The Maybe Group have been acquired by hospitality group, Public. Picture: Richard Dobson

Jon Adgemis’ Public Hospitality Group has confirmed it is working to reset its debt facilities, as part of a renegotiation with lenders in a bid to right the pub and hotel group.

A spokesman for the group, which represents almost 22 pubs and hotels across Sydney and Melbourne, said Public was now moving to negotiate its debt facilities with lenders after a bid to secure a $500m refinancing with Bain Capital collapsed.

“Public is working constructively with its lenders to reset the Group’s external debt facilities,” he said.

“The reset will position Public to continue the development of its portfolio of high-quality accommodation and hospitality sites across Sydney and Melbourne.”

This comes after The Australian revealed the pub baron was now working with his existing backers to put together a debt package for his pub group after the collapse of an earlier proposal with Bain.

This would see existing debts spread across the operating entities and property assets within the group rolled into one debt package.

Public’s string of current lenders sees the group paying circa 12 per cent on its borrowing, with a small mezzanine debt component at 18 per cent of higher.

The Public spokesman said the terms of the debt “reset” were still being finalised, as Mr Adgemis negotiated with his group’s lenders, who are understood to be supportive of the pub company.

“Public remains in close contact with its suppliers and employees and thanks them for their continued support,” he said.

Public has built up a list of lenders across the group, after Mr Adgemis snatched up a network of pubs and venues before and during the Covid-19 pandemic.

This includes lenders across Deutsche Bank, Gemi Investments, Belgravia Group, Byblos Corporation, Millbrook, Alex Waislitz’s Thorney Investment Group, Lance Rosenberg’s Gleneagle, among others.

Public’s lenders are understood to be supportive of the group and are engaging with Mr Adgemis as he seeks to nail down a new debt deal.

Gemi told The Australian on Wednesday it is supportive of Public Hospitality Group while it works through stabilising its capital structure. “We continue to believe in the value of Public’s underlying operations and management’s long-term strategy,” the lender said.

The new negotiations come as the latest efforts in securing a refinancing of the pub business, which Mr Adgemis has been seeking to nail down since mid 2023.

The pub group is understood to be facing a significant cash crunch as it faces the need to complete the rebuild and refurbishment of six venues, including high profile Bondi hostel Noah’s Backpackers.

Mr Adgemis was close to securing a deal with Bain Capital, the second time the former KPMG deal-maker had attempted to line up a financing package with the American private equity players.

However Bain had demanded Mr Adgemis and his company pay a significant upfront cash payment as part of its conditions before commencing due diligence on the deal.