By Ian Neubauer

Sydney-based hotel group Community Entertainment Assets (CEA) bit the bullet this week when its portfolio of six urban and rural pubs was placed into receivership on Wednesday (October 1).

The portfolio includes the Royal Hotel and the Tourist Hotel in Queanbeyan, the Club Hotel and Ground Zero Hotel in Liverpool, the Royal Hotel at Richmond and the Woodport Inn near Erina.

CEA acquired the pubs between 2005 and 2008, at a time when the hospitality property market was at its peak. Higher debt costs and a downturn in gaming revenue attributed to last year’s smoking ban then coagulated to create a perfect financial storm for the group that raised its debt profile to levels surpassing lenders’ covenants, The Australian Financial Review reported.

Receivers Ferrier Hodgson do not plan to sell the hotels immediately, with partner Peter Walker saying he was optimistic that a pickup in gaming revenue was expected to enhance the portfolio’s profitability within the next six months.

But the decision to stay the sales is also likely linked to a stagnant property market that has seen a number of forced sales in recent months.

Receivers PPB recently sold six NSW pubs belonging to Mark Alexander-Erber’s PubBoy group, which collapsed under burgeoning debt in February this year.
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