UPDATE (6/6/2021): As confirmed to Business News Australia by REMI Capital's voluntary administrators, the total debt owed to creditors has blown out to $124 million. Of the $124 million, $62 million is owed to noteholders, $6 million is owed to taxation and statutory authorities, $1 million to employees, and $2 million to other creditors.
Just months ago, boutique investment company REMI Capital was encouraging self-managed super funds to diversify their investments in the company’s property portfolio by offering benchmarked returns paid quarterly.
Yesterday, the company called in voluntary administrators, leaving 450 investors caught up in the company’s $70 million collapse.
Chris Baskerville from specialist insolvency and business recovery firm Jirsch Sutherland has been appointed voluntary administrator to the REMI Capital group to examine the company’s collapse, the latest in a string of failures for the property industry.
The Melbourne-based REMI Capital was founded in 2016 by Peter Terrill when it was then known as C2 Capital, an Australian and Asian-focused private equity investment firm. The company has no connection to C2 Capital Partners, associated with Jack Ma’s online retail giant Alibaba.
REMI Capital, which also has an office in Brisbane, describes its business as offering investment opportunities in the boutique property development, healthcare real estate, and operations sectors. The company is understood to have employed a team of more than 50 investment, venture capital and property professionals seeking opportunities for investors.
Among the company’s biggest projects was the Rockbank town centre development in the city of Melton, one of many in Melbourne that included mixed use projects, office developments and land subdivisions.
REMI Capital has left 450 investors exposed to these projects through an estimated $70 million black hole of outstanding debts.
“We are undertaking an urgent financial assessment and working closely with the directors to try to find a solution and provide the best outcome for investors and creditors,” says Baskerville, in a brief statement today.
“One of these solutions is likely to be a deed of company arrangement (DOCA) proposed by the directors.”
A DOCA doesn’t guarantee a full recovery of funds for investors, but usually offers a better outcome for creditors than liquidation.
Baskerville will prepare a report for creditors to be presented at the first creditors meeting scheduled for 6 June 2022.
It is understood REMI Capital’s management had been working behind the scenes for several weeks to find a solution to its problems before finally calling in a voluntary administrator today.
Former staff members have reported that managing partner Mark Prestige apologised via a company email that they had been kept in the dark over recent weeks, but he says it was on the advice of ‘external legal counsel’ as the company undertook modelling to determine its financial position.
Despite the company’s looming problems, REMI Capital’s LinkeIn profile shows several posts in the months leading up to the collapse that urged self-managed super fund investors to consider diversifying their portfolio with an investment in the group. REMI Capital offered high returns with quarterly interest payments to investors seeking cashflow assets.
“What makes a good investment for an SMSF will depend on each fund’s objectives,” the company spruiked. “If you are looking for investment to enhance your portfolio, talk to one of our experts today!”
In his email to staff, Prestige says he is confident a DOCA could be secured to ensure REMI Capital’s survival. However, the final decision is ultimately in the hands of creditors.
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