By Andrew Starke
Listed pub trust Hedley Leisure & Gaming Property Fund (HLG) has been given an extra two years to settle its debts with nine bank lenders with the deadline extended until October, 2012.
The group has also received shareholder and Australian Stock Exchange (ASX) approval to change its name to Redcape Property Fund Limited (RPF) from tomorrow (Dec 1).
Speaking at the company’s AGM in Melbourne, HLG executive chairman, Colin Henson, said it was possible that the fund could achieve an acceptable balance sheet and debt to asset ration within the three year period given reasonable economic conditions.
As at June 30, the trust’s bank debt stood at about $741 million compared to investment property values of about $962 million.
HLG has since sold five NSW hotels for a total of $36.275 million and Henson said the sale of pubs would continue in ‘a measured way’.
“Although pub property values have been under pressure in recent times, the underlying operations of the fund remain strong,” he said.
However, Henson conceded that the status of two of HLG’s three major tenants remained a concern.
National Leisure and Gaming (NLG), which runs 32 HLG owned pubs, faces an uncertain future while Hedz (12 pubs) is in receivership.
“Naturally, it would be preferable for HLG to enjoy a market perception of a strong tenant base,” said Henson. “As mentioned, all rents are up to date and we otherwise have no real problems with the current tenants, but the adverse circumstances of two of HLG’s major tenants give rise to concerns of instability.
“That being the case, management and its advisers are continuing discussions with third parties and these discussions may result in a significant change to the structure of the HLG tenants,” he said.
HLG shares were trading at 35 cents at midday today (Nov 30), up from 32 cents seven days ago.