A battle looms over the future of collapsed property trust Prime Retirement and Aged Care Property Trust, after founder and former managing director Bill Lewski appointed his own administrators to the trust’s management vehicle.
Lewski sold out of Prime Trust in May 2008 for between $60-80 million, but in the last few months Lewski has appeared to be manoeuvring around the Trust.
In early August, Lewski regained control of the vehicle which manages the trust – Australian Property Custodian Holdings –
from investment firm Kidder Williams.
Lewski is a secured creditor of APCH, and is owed $14 million by the company.
But yesterday, Lewski pre-empted a move by Prime Trust’s directors (led by chairman and former federal health minister Michael Wooldridge) to put the trust into administration by appointing his own administrators to APCH.
This forced the Prime Trust board to appoint the same administrators – Stirling Horne and Peter Vrsecky of Lawler Draper Dillon – to Prime Trust and a number of associated corporate entities.
“The board had intended to appoint PwC as voluntary administrators over the Prime Trust controlled entities but sees no advantage in appointing an alternative administrator,” Prime Trust said in a statement.
These moves come just days after three different sets of receivers were appointed to 10 retirement villages owned by Prime Trust.
Wooldridge slammed the decision of Queensland-based bank Suncorp Metway to appoint receivers, saying the board was on the cusp of an asset sale that would have wiped out the company’s secured debt, estimated to be about $300 million.
Administrator Stirling Horne told SmartCompany today that his task was complicated by the fact receivers are in direct control of all but one of Prime Trust’s retirement village.
He says the receivers and secured creditors will need to establish how they proceed, either selling off the villages individually, in small groups or in one big group.
Whether there is any money left for unit holders in Prime Trust – of which Lewski is the largest – remains to be seen.
Horne says that while Prime Trust’s directors had been working towards a deal valuing the villages at $400 million – well above the $300 million owed to secure creditors – a sale at that price was probably no longer achievable.
“The view is now that that value has been impacted on significantly by the appointment of receivers,” Horne says.
He now believes there is “some chance” secure creditors would not recover all their money, which would mean unit holders would receive nothing.
Horne says at present there is no suggestion that Lewski may look to recapitalise the trust.
“There has been no indication yet that that might be the case.”
If the sale process gets underway quickly, Horne estimates it could take six months to complete.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
