Jamie Oliver restaurants among Keystone receiver sale
The receiver appointed to high-profile pub and restaurant operator Keystone Group over an $80m debt wants to sell its string of venues in one lot by the end of September.
Morgan Kelly, of Ferrier Hodgson, says this will give a new owner time to get systems in place ahead of the peak summer trading season.
Keystone owns the Australian rights to Jamie Oliver’s Jamie’s Italian restaurant chain and a string of top Sydney venues including Bungalow 8, Cargo Bar, and The Chophouse.
Its lenders – special situations funds controlled by international private equity groups KKR and Olympus – appointed Kelly as receiver on Tuesday after it became clear Keystone, led by executive chairman Richard Facioni, would not be able to make a $25 million payment due Wednesday.
“We certainly don’t want to conduct a fire sale,” Kelly says.
They are iconic brands and iconic venues
“There are synergies to selling the Keystone businesses in one line.
However, he says individual venues might be sold if buyers are prepared to pay a premium.
“We’ve got an open mind and will consider all options,” he says.
Keystone has valued Cargo and Bungalow 8 at $30 million and its Kingsleys Woolloomooloo steakhouse at between $7 million and $9 million.
Kelly says the businesses are “very well-run”.
Bungalow 8 and Cargo Bar have been valued at $30 million.
Asked if they are cash-flow positive, he says: “That’s what I would expect them to be, but I’m still in the process of conducting an assessment”.
“All of the venues are good operations with experienced management.
“They are iconic brands and iconic venues.”
He declined to say how much he expects to reap from the sales process but says there has already been “a great deal of interest” from potential purchasers.
On Wednesday, Facioni told The Australian he was surprised KKR and Olympus chose to appoint Kelly.
We certainly don’t want to conduct a fire sale
However, Kelly says his appointment “was the last resort, and the lenders had explored all options before the appointment of receivers”.
“They’d been working with management for a very long time, seeking a landing point.”
Company accounts show that in January Keystone agreed to a deal with its lenders under which it would raise an additional $5 million, explore selling some of its venues and make a $25 million payment by the end of June.
While the $5 million was successfully run, the group sold only one pub, the Newtown Hotel, to Computershare founder Chris Morris’ Colonial Leisure Group.
This article originally appeared on www.theaustralian.com.au/property.
