CROMWELL DEAL FALLS THROUGH

CROMWELL DEAL FALLS THROUGH

PROPERTY funds manager Cromwell Group’s (CMW) $15 million proposal to buy an embattled funds management business has fallen through, as it was unable to reach an agreement with its banks.

Cromwell managing director Paul Weightman has withdrawn the proposal to buy the management rights to Orchard Funds Management, because major financiers would not agree to the company’s proposed term, interest rate margins and loan-to-ratio covenants.

“It’s just one of those things - you put the proposal up and if you can be happy enough to get something on your own terms, that’s great, but in this case we couldn’t,” he says.

“We would have paid $15 million for the management rights to the company, managing the funds through to the other side of their difficulties, but the fund we would have managed is worth around $1.5 billion.

“Obviously there’s a lot of history with Orchard and the fact they were in default meant we needed some debt to keep it going – we thought it was sensible but it wasn’t acceptable to the banks."

Weightman says other opportunities are out there, as Cromwell continues due diligence on the Qantas Headquarters in Sydney, while shareholders will vote today on funding for 321 Exhibition Street in Melbourne and the TGA Complex in Canberra.

“Cromwell will continue to look for opportunities in the direct property space to acquire businesses and assets that enhance the current business with a target of 80 per cent earnings from property rentals and 20 per cent from funds management," he says.

“When this happens and you don’t get your way, you just do something else."

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

WA suspends planned quarantine-free travel bubble with Queensland

WA suspends planned quarantine-free travel bubble with Queensland

The proposed quarantine-free travel bubble between Queensland and W...

Start-ups ready for orbit aboard Space Machines Company’s first mission

Start-ups ready for orbit aboard Space Machines Company’s first mission

The start-up world is clamouring for its place in orbit with Austra...

"Wake-up call" for the Gold Coast as rideshare driver tests positive to COVID-19

"Wake-up call" for the Gold Coast as rideshare driver tests positive to COVID-19

An unvaccinated Gold Coast-based rideshare driver in his 30s is rep...

Retailers set for pre-Christmas spree as hospitality takes a bigger bite

Retailers set for pre-Christmas spree as hospitality takes a bigger bite

Australian retailers are heading for another big spending spree ove...