Newly formed company Australian Gaming & Entertainment has collapsed after launching a bid last month to publicly list and buy a $95 million portfolio of Sydney pubs.
AG&E was placed in administration on Monday with Cliff Rocke, John Bumbak and David Winterbottom of KordaMentha appointed as administrators.
It’s a speedy fall from grace for the pub group, which had optioned five pubs from the private Lewis group for $95 million in a bid to become an aggregator in NSW’s fragmented pub industry.
AG&E, which was to be chaired by industry veteran Bill Brown, was planning on an initial public offering.
But Rocke told SmartCompany this morning the IPO didn’t ever get off the ground as the funds could not be raised.
“[AG&E] were going to have a float and get confirmation from the joint lead managers from the float and the proceeds from the float were going to be used to acquire the hotels,” he says.
But despite indications AG&E’s bookbuild was proceeding as planned, “cornerstone” institutional investors did not submit bids as expected and so the group could not exercise its option to purchase.
AG&E described this to Rocke as “devastating news” with “no time to make alternate arrangements”.
Rocke is still determining who the major creditors are and says at this stage there were no employees.
“The directors have some exposure whether they put in equity or unsecured amounts,” he says.
The pubs at the centre of AG&E’s plans were the Beverly Hills Hotel, The Canley Hotel, the Croydon Park Hotel in Ashfield, Wentworthville Hotel near Parramatta, along with either the Kogarah Tavern or the Lapstone Hotel.
The Australian reported last month investment banks CIMB and Wilson HTM had been drafted in to assist AG&E in raising equity, with a roadshow for the Sydney-based company scheduled to kick off after Easter.