Jon Adgemis works on a new debt deal for his Public Hospitality Group

Pub baron Jon Adgemis is seeking to secure a new debt deal for his pub group after Bain Capital walked away from a $500m refinancing of the business.

Jon Adgemis at the rebuild of Oxford House in Paddington with Peter Crinis, who ran the hospitality side of the business. Picture: David Swift

Sydney deal-maker Jon Adgemis is working on a new deal to rescue his ailing pub empire after a $500m refinancing with private lenders Bain Capital fell over.

The Australian understands Mr Adgemis is now seeking to reorganise the debts across his group of almost 22 pubs and other properties, in a deal which would see the group rolled up into one debt package.

Currently, Mr Adgemis’s Public Hospitality Group is financed with a string of loans tied to the assets in the group, with lenders individually backing either the operating pub and hotel business or the property assets.

Public Hospitality is paying about 12 per cent interest on its borrowings, but the pub network is carrying a smaller component of higher-interest mezzanine debt charged at up to 18 per cent.

Mr Adgemis is now understood to be working with a group of lenders backing Public Hospitality to redraw the debts of the pub group.

Public Hospitality has faced a cash crunch as it seeks to complete the rebuilding and renovation of several properties which the group rushed to redevelop soon after purchase. The group has also faced a jump in costs, amid a broader pullback in consumer spending.

Bain had been lined up to finance a new debt deal for the group, which would have seen the almost $500m in loans with several existing lenders rolled up.

But the deal was pronounced dead on the weekend by Bain, which had demanded a significant upfront cash contribution from Mr Adgemis’s company. “PHG has not complied with the terms of the agreement and so the agreement is now at an end,” Bain said.

On Tuesday, a Bain spokesman told The Australian the firm had nothing more to say after its earlier pronouncements.

Public Hospitality operates 17 pubs and boutique hotels around Sydney and Melbourne.

The group is renovating six pubs and other venues, including the well-known former hostel, Noahs Backpackers at Bondi Beach.

Public Hospitality is backed by a group of banks and non-bank lenders, including Deutsche Bank, Gemi Investments, Belgravia Group, Byblos Corporation, Millbrook, Alex Waislitz’s Thorney Investment Group and Lance Rosenberg’s Gleneagle.

In recent days, KordaMentha approached several lenders to the pub group, touting its services after reports the Public Hospitality refinancing was faltering.

The intervention by KordaMentha was seen as curious by some lenders, given the insolvency practice’s close links with Bain after working on the restructure of Virgin Airlines.

Lenders are understood to be supportive of Public Hospitality.

Mr Adgemis has roped in his former firm KPMG to assist with the debt deal, along with former NAB executive Andrew Hagger, who previously managed Andrew Forrest’s Tattarang and ­Minderoo.

Former Bank of Queensland boss George Frazis has also entered Mr Adgemis’s orbit, with the two striking a deal over a new restaurant in Sydney.

The group was assembled by Mr Adgemis from venues snapped up during the Covid-19 pandemic and pubs previously purchased by the former KPMG deal-maker, who has extensive property interests.

The collapse of the deal with Bain over the weekend marked the second time Bain had taken a run at Public Hospitality.

Public Hospitality baulked at a deal last year after Bain demanded a hefty equity interest component in the pub group as part of any debt refinance.

More recently, Public Hospitality has sought to negotiate its refinancing through Sydney private debt investment house Madigan Capital.

Madigan chief operating officer Chris Winslow said questions relating to the debt deal should be directed “through to our client, Bain Capital, instead of Madigan Capital”.

Bain has built a reputation in the industry after its role in several deals.

The group’s takeover of Virgin after the airline’s collapse saw it remove chief executive Paul Scurrah soon after, despite earlier assurances he would stay on.

Originally published as Jon Adgemis works on a new debt deal for his Public Hospitality Group