By Andrew Starke
The ING Real Estate Entertainment Fund (IEF) has announced details of a rescue deal with the embattled pub landlord likely to be restructured by a New Zealand-based private equity firm.
The pub owner was unable to recover from the twin blow of its two biggest tenants, Icon Hospitality Group and Alchemy Hotels Management, sliding into receivership over the past 18 months.
Yesterday (Nov 1) ING Management, the responsible entity for the ING Real Estate Entertainment Fund, said it had entered into an implementation deed with Torchlight, an Australasian private equity fund.
While the deal still needs unitholder approval, it seems certain that Torchlight subsidiary Bodiam, which previously held a 17.6 percent stake in the ING pub trust, will become the new responsible entity.
"The proposal offers a number of benefits for unitholders, including access to new capital to assist IEF in achieving its strategic objectives,” said ING Management Chairman, Michael Coleman.
"Torchlight brings access to experience in unlocking asset value and is strongly aligned to the fund through its existing investment position.”
In February, the ING Group concluded a strategic review of its global Real Estate Investment Management platform and began a phased withdrawal from its Australian operations.
The ING Real Estate Entertainment Fund currently controls 20 pubs and 14 clubs, mainly in NSW, down from 36 pubs and 15 clubs in 2009.
The likely resolution of the pub landlord’s capital structuring may mean that the ongoing break-up of ING/Icon, Redcape/NLG and Compass hotel assets is concluded in the first half of 2012.
A unitholder meeting on December 5 will discuss the resolution.
News of the proposal saw shares in the trust rally from 6c a share last week to 8c at midday today (Nov 2).