Aussie Company Collapses Over $70 Million

In addition to real estate projects, hundreds of people have been affected as administrators urgently investigate where the money has gone.

An Australian company with offices in Melbourne and Brisbane has collapsed, affecting hundreds of people and real estate projects as it was revealed to be owed an estimated $70 million.

The collapse affected 450 investors when the investment company, called REMI Capital, was placed under voluntary management on Wednesday.

Mark Prestige, who was a managing partner at REMI Capital for nearly four years, acknowledged that there had been a “lack of communication” from the company in recent weeks.

“Remi had been advised in recent weeks by an outside legal counsel not to communicate until the modeling that made this difficult decision possible was completed,” he wrote in an email addressed to investors, shareholders and ex-employees.

“REMI apologizes for any lack of communication over the past few weeks. We ask that you rely on reports to creditors and not on speculation you may hear.”

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The independent investment firm had promised access to “responsibly and ethically managed investments” and included a range of boutique real estate developments, its website revealed.

The property portfolio spanned a range of areas in Melbourne, including projects in the suburbs of Tarneit, Rockbank, Sunshine, Pakenham, Laverton and Sunbury.

REMI Capital also provided income products backed against the company and its assets, and paid quarterly interest payments to investors, the company said on its website.

It claimed to have significant reach across Australia with penetration into the overseas market, including the APAC region and South Africa, it added.

Chris Baskerville of specialty insolvency and business recovery firm Jirsch Sutherland has been appointed as administrator.

He said it was too early to tell what had happened, as his company is currently conducting an urgent investigation to identify where the $70 million has gone.

“We are conducting an urgent financial review and are working closely with the directors to try to find a solution and provide the best outcome for investors and creditors,” he said.

“One of these solutions is likely to be a Deed of Company Arrangement (DoCA) proposed by the directors.”

According to the Australian Securities & Investments Commission, a DoCA seeks to maximize the company’s chances of survival and aims to provide creditors with better returns than an immediate liquidation of the company.

Mr Prestige, who headed the company formerly known as C2 Capital, said he sympathized with the parties involved and that voluntary governance was considered the “best outcome” for creditors.

“Thanks to this process, the board of directors can propose a deed of partnership agreement at the second meeting of creditors,” he said.

“Based on current models, a DOCA will result in a better return for all creditors instead of the alternative liquidation procedure where the outcome does not look positive.

“Remi is committed to continuing to work with the trustee and creditors and for favorable consideration when the detailed DOCA proposal is submitted.”

The trustees have already been approached by a number of REMI Capital investors with a creditors meeting scheduled for June 6.

It comes as companies at the “big end of town” including those listed on the Australian Stock Exchange, risk collapsing if interest rates rise and financial support for Covid ends, insolvency experts warn.

Financially ailing companies, propped up by a pause in debt collection during the pandemic and the injection of economic support from governments, often known as zombie companies, are also said to be a “growing phenomenon,” she added.

The construction industry has been particularly hard hit by collapse this year.

Two major Australian construction companies including: Condev . from Gold Coast and industry giant Probuild have already been liquidated this year.

Smaller operators like Hotondo Homes Hobart and Perth firms Home Innovation Builders and New Sensation Homes, as well as Sydney-based company Next have also collapsed, leaving homeowners out of pocket and with unfinished homes.

An industry insider told news.com.au earlier this year that half of Australian construction companies on the on the brink of collapse because they act insolvent, and it could hit the homes of thousands of people in the coming months.

Operators in other industries have also fallen.

Send, a company that promised to deliver groceries in less than 15 minutes, collapsed earlier this month jobs of 300 employees in Sydney and Melbourne at risk.

Concerned REMI Capital investors should contact the manager at Remicapital@jirschsutherland.com.au.

Do you know more or do you have a similar story? We look forward to hearing from you sarah.sharples@news.com.au

Read related topics:BrisbaneMelbourne

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