By Ian Neubauer
A senior executive at pub owner Tankstream Funds Management has disputed a report it is in danger of being taken over by the banks while it seeks funds from private investors to expand its portfolio.
A report published today (Jun 12) in The Sydney Morning Herald claimed Tankstream Leisure Group – one of the fund’s three main business units – had breached its lending covenants on a $14 million loan from National Australia Bank as a result of a 20 per cent decline in earnings derived from its five NSW pubs.
But Tankstream managing director Craig Williams told TheShout the report contained numerous inaccuracies and misled readers to believe the fund was facing major financial strife.
“We have breached what are regarded as minor covenants,” he said. “We are not in breach of our interest cover or loan-to-value covenants – the main covenants. What happened is we missed a quarterly budget back in March by 15 per cent. The reduction in the values of our pubs that was reported is also incorrect. Our pubs are sound and are performing well.”
Williams added that he would be taken up the issue with the reporter, Vanda Carson, and the publisher, Fairfax, but ruled out legal action at this point in time.
“There were numerous inaccuracies in the story and we are very unhappy because the journalist has taken a very negative bent in terms of what we are trying to achieve and we will be following up with the paper. I spoke with the journalist, gave her a lot of facts, and we have been misquoted.”
Tankstream is seeking to raise up to $20 million through a private investment scheme to acquire pubs in Wagga Wagga and Lismore.
“We have a very popular outlook on the sector,” Williams said. “It is a good time to purchase pubs at the moment with good solid cash flow and diversity in earnings. These are the sort of assets we are seeking to by – primarily in rural areas of NSW.”
To read The Sydney Morning Herald’s report on Tanksteam, click here.
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