By Andrew Starke

The listed Hedley Leisure and Gaming Property Fund (HLG) has cut ties with its founder, Queensland pub baron Tom Hedley, whose private property empire went into receivership earlier this month.

The trust has informed the Australian Stock Exchange (ASX) that it will be changing its name, appointing new management and moving its headquarters from Cairns to Melbourne.

It was previously run by HLG Management, one of Hedley’s private companies.

Trust executive chairman Colin Henson said the trust had reached an agreement with Hedley, who will not be paid any compensation. Receivers Ernst & Young control the majority of Hedley’s stake in the fund.

Henson believes the benefits of internal management will include significant cost savings.

“By terminating the previous external management agreement (which had eight years to run) the savings for the 2010 financial year are estimated at $2.7 million and over the eight year period the savings are estimated at $22 million,” he said.

Henson was previously non executive chairman of the trust, which owns about $1.1 billion of pub freeholds, but has now been appointed executive chairman.

His first order of business has been to distance the new management structure from the old order.

“In order to totally separate the fund from the Tom Hedley Private Group and improve the efficiency of management, the fund’s head office has been established in Melbourne to be close to key stakeholders,” Henson said.

The issue of a name change will be discussed at the group’s next annual general meeting.

The market reacted positively to the news, driving the share price up to 34c at 11am today (Jul 29). It was 20.5c seven days ago.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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