Saturday, June 25 2022

Hundreds of people have been affected alongside property projects as administrators urgently investigate where the money is going.

An Australian company with offices in Melbourne and Brisbane has collapsed, impacting hundreds of people and property projects, as it was revealed to be owed around $70million.

The collapse affected 450 investors as the investment firm, which calls itself REMI Capital, was placed in voluntary administration on Wednesday.

Mark Prestige, who had been a managing partner at REMI Capital for nearly four years, acknowledged there had been a “lack of communication” from the firm in recent weeks.

“Remi had been advised by outside legal counsel not to communicate for the past few weeks until the modeling was complete, which made this difficult decision possible,” he wrote in an email addressed investors, shareholders and former staff members.

“REMI apologizes for any lack of communication over the past few weeks. We ask that you trust all reports to creditors and not rely on any speculation you may hear.

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The independent investment firm had promised access to “responsibly and ethically managed investments” and included a range of boutique property developments, according to its website.

Its property portfolio covered a range of areas in Melbourne, including projects in the suburbs of Tarneit, Rockbank, Sunshine, Pakenham, Laverton and Sunbury.

REMI Capital was also developing income products backed by the company and its assets, paying quarterly interest payments to investors, the company said on its website.

It claimed to have a significant reach across Australia with overseas market penetration including the APAC region and South Africa, he added.

Chris Baskerville of insolvency and corporate recovery firm Jirsch Sutherland has been appointed as a director.

He said it was too early to say what happened, with his company now undertaking urgent investigations to determine where the $70 million went.

“We are undertaking an urgent financial assessment and working closely with administrators to try to find a solution and deliver the best outcome to investors and creditors,” he said.

“One of those solutions will likely be a deed of corporate arrangement (DoCA) proposed by the directors.”

A DoCA tries to maximize the chances of the business continuing to operate and aims to provide a better return to creditors than an immediate liquidation of the business, according to the Australian Securities & Investments Commission.

Mr Prestige, who ran the company formerly known as C2 Capital, said he sympathized with the parties involved and that voluntary administration was decided as the “best outcome” for creditors.

“This process will allow for a deed of partnership arrangement to be proposed by the board of directors at the second meeting of creditors,” he said.

“Based on current modeling, a DOCA will result in a better return for all creditors rather than the alternative course of liquidation where the outcome does not look positive.

“Remi is committed to continuing to work with the administrator and creditors and to gain favorable consideration when submitting the detailed DOCA proposal.”

The administrators have already been contacted by a number of investors in REMI Capital with a meeting of creditors scheduled for June 6.

It comes as businesses in the ‘big end of town’, including those listed on the Australian Stock Exchange, risk collapsing as interest rates rise and Covid financial support is removed, warned insolvency experts.

Financially distressed companies, which have been buoyed by a pause in debt collection during the pandemic as well as the injection of economic support from governments, often known as zombie firms, are also said to be a ‘growing phenomenon’. , they added.

The construction industry in particular has been hit hard by collapses this year.

Two major Australian construction firms, including Gold Coast-based Condev and industry giant Probuild, have already gone into liquidation this year.

Smaller operators like Hotondo Homes Hobart and Perth, Home Innovation Builders and New Sensation Homes, and Sydney-based Next have also collapsed, leaving homeowners out of pocket and with homes unfinished.

An industry insider told earlier this year that half of Australian construction companies are on the verge of collapse as they are insolvent, and it could see thousands of homes affected within months. coming.

Operators in other industries also fell.

Send, a company that promised to deliver groceries in less than 15 minutes, collapsed earlier this month, jeopardizing the jobs of 300 staff in Sydney and Melbourne.

Relevant REMI Capital investors should contact the Administrator on [email protected]

Do you know more or have a similar story? We want to hear from you [email protected]

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