THE fortunes of 25-year old Gold Coast property icon, the Raptis Group, have gone from bad to worst after lender Capital Finance moved in yesterday.
Yesterday’s revelations follows Raptis’ warning to investors just over a week ago that there is going concern over the ability of the group to continue if it does not secure financier support.
Raptis, one of the Gold Coast’s biggest property developers, promptly went into a trading halt yesterday after Capital Finance, the subsidiary of finance giant HBOS, appointed receivers KordaMentha to companies controlled by Raptis that are associated with the $700 million Southport Central project.
Southport Central is a mixed-use development which will comprise dual beachside towers on the prized site where one of the Gold Coast’s best known landmarks, the Dolphin Arcade, once stood. The first tower will front
The Hilton Surfers Paradise Hotel and Residences will comprise approximately 170 luxury hotel rooms and 340 apartments.
But yesterday, it has been reported that the 200 people workforce laying the foundation on the construction site have walked off of the job.
And sub-contractors have met to discuss the crisis, many are also owed millions of dollars.
Raptis’ company secretary Malcolm Cory yesterday said the directors are considering funding alternatives and seeking advice before taking appropriate action.
“We require a trading halt for two days. The trading halt should end once we release our announcement to the market,” was the only message Cory was able to offer.
Capital Finance is one of several lenders to the group. The group currently has $513 million in current assets and $765 million in current liabilities, including $669 of interest bearing debt. This includes $87 million in loans that are not due for settlement with 12 months however are classified as current as it has been decided to sell the underlying asset.
As at June 30, the group’s total liabilities including non-current debt is $902.68 million.
Earlier this month Raptis revealed to the market that there is a going concern over the ability of the group to continue if it does not secure financier support.
The Gold Coast based group blamed a slowdown in revenue growth, increase in costs and asset value write downs for its poor net loss of $13.9 million for the year ended June 30.
At the same time, director James Raptis said the company has historically financed its development projects on a short term basis as a development site moves through the various stages of approval until construction finance is appropriate.
“Our corporate funding model depends on debt funding and proceeds from sale of developed property to meet the carrying costs of property held for future development. The debt market has contracted severely during the last six months.
“But the recent shortfall in liquidity in world finance markets has impeded this process,” he added.
Last month, the group cashed in its half stake in the Gold Coast International Hotel for $56.5 million (Raptis’ share $28.25 million), the proceeds went to pay off debt.
“The ability of the group to continue as a going concern and realise assets in the ordinary course of business, is dependent upon the continued support of the group’s financiers,” Raptis said at the time.
The group was founded by Greek immigrant Jim Raptis, who moved to the Gold Coast in 1973. Raptis Group listed on the Australian Stock Exchange in July 1986. Over the past 25 years, the group has been responsible for developments such as Chevron Renaissance, Pebbles, Platinum On The Beach, Bel Air on Broadbeach, The Phoenician and The Moroccan.
RPG shares were suspended at 40 cents.
Australian Property Journal
