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Queensland property developer CEC enters into receivership
The listed North Queensland property developer and builder CEC Group has gone into receivership, after failing to renegotiate its bank debt facility.
Secured creditor Commonwealth Bank called in receivers from McGrathNicol yesterday after the company was unable to renegotiate about $80 million in loans or get an employee buyout over the line.
McGrathNicol partners Chris Honey and Keith Crawford said in a statement that they will work with key stakeholders to stabilise and prepare the group's operating businesses for sale, while developing a strategy to maximise the recovery from the group's significant real estate assets.
"All genuine offers for the group's businesses will be considered in order to achieve the best possible return for all the group's stakeholders," the receivers told the Australian Securities Exchange.
"We will be working closely with employees, customers, suppliers and interested parties over coming days," it said.
CEC this week announced its December half figures showing revenue down 42% to $33 million, and losses widening from $11.4 million to $69 million. It recorded a $9 million impairment change, and its net tangible assets were put at minus 52 cents per share.
CEC said it was hit by funding problems, the deferral of infrastructure projects, poor consumer confidence leading to fewer property sales, and impairments and writedowns.
However, the directors said they believed the writedowns would be recovered through an "organised" sale of properties over the next 12 months.
CEC is said by the Australian Financial Review to owe $25 million to creditors other than the Commonwealth Bank, which include the Australian Taxation Office, Queensland Office of State Revenue and employee super funds.
Attempts to contact McGrathNicol and CEC chief Roy Lavis were not successful this morning.
But in a statement this afternoon, S V Partners director Terry van der Velde said the role of the voluntary administrator is to look after the interests of all the creditors.
He added: "The receivers' primary responsibility is to the secured creditor, it is important that the the other creditors do not get forgotten in this process."
"The receivers now have control of all the companies and accordingly are in the driver's seat, with regards to the future of the company," S V Partners said.