Projects - Distressed Assets
SOHO Rockdale (NSW) Pty Limited
Receivership of distressed mixed-use development
Summary
- High-density residential
- Sydney metropolitan
- Receiver for senior financier
- Senior debt ($40m)
- Mezzanine debt ($5m)
Issues
- Mixed-use development of two residential towers with 103 units above six retail shops
- JV partner had misappropriated funds
- Developer and builder were in dispute and mezzanine financier had commenced litigation. Builder had abandoned the site with works ceased at c65% complete
- Construction was five months behind schedule and AU$35m in pre-sales were at risk
- Planning approval included a requirement to purchase Council land running though the development before completion (price was never agreed and in dispute)
Solution
- Mediated with JV parties and negotiated with builder to return to complete works within budget (replacement builders’ prices were 40% higher)
- Negotiated an agreement with Council to purchase the laneway
- Negotiated with the mezzanine financier to compromise debt
Outcome
- Completed construction, achieved OC and strata subdivision within seven months
- Facilitated full repayment of the senior debt plus penalty interest and fees
- Project came out of receivership and residual units were refinanced