Just six months after Rick Munday was listed on the BRW Young Rich list with a fortune of $114 million, his pub empire has been placed in receivership by its main lender, National Australian Bank.
Munday Group, which owns eight leaseholds pubs and two restaurants in Victoria, has been trying to sell its portfolio since late January, when Munday said the business had attracted strong interest from private equity groups who were moving back into the pub sector.
But an initial sales campaign that ended in mid March failed to flush out a buyer. The portfolio remains on the market through agents Jones Lang LaSalle, who are marketing the pubs for $45 million.
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However, it remains unclear whether a sale at this price would cover the level of debt within the Munday Group.
Insolvency firm PPB is now in control of the 17 entities associated with the Munday Group. The company operates well-known inner city Melbourne pubs including the Golden Nugget in the Melbourne CBD, Players on Lygon in Carlton and The Court Jester in Prahran.
Munday also owned pubs in regional Victoria, including The Whalers Inn in Warrnambool, The Grand Hotel in Frankston and The Golden Fleece Hotel in Melton.
In total, Munday Group controls 432 gaming machines.
The group also runs the Man Bo Chinese restaurant and the Fisherman’s Pier Restaurant in the regional town of Geelong.
A spokesperson for PPB says the receivers and managers intend to trade the pubs and restaurants as normal while the sale process continues.
But the sale process is taking place at a difficult time, as the Victorian Government is in the process of restructuring its poker machine licensing regime.
Currently, just two companies, Tabcorp and Tattersalls, are able to operate Victoria’s 27,5000 gaming machines. But under a new regime that will come into force in 2012, the Government will auction individual licences for every machine via a competitive auction process.
The process starts on 10 May – which makes the process of buying a pub with gaming machines a lot more complex for prospective investors.
Munday has been steadily selling off his pub assets since late 2007, when he sold seven venues in Queensland and South Australia to Independent Pub Group for $61 million.
He followed this up last year with the sale of the Lorne Hotel for $20 million (to former business associated John Upham) and the Torquay Hotel (to publican Simon Vickers-Willis).
According to BRW, Munday’s wealth increased by $10 million to $114 million despite what was a horror year for the hotel sector.
Munday started out as an apprentice chef before teaming up with a group of business associates to start buying pubs.