Pub Trust hit by Hedley Fallout

By Andrew Starke

Listed pub trust Hedley Leisure and Gaming Property Fund (HLG) has played down reports linking it to the collapse of businessman Tom Hedley’s private empire, despite yesterday’s (Jul 2) decision to call a trading halt.

The Cairns-based property developer and publican has a 58 per cent stake in the trust, which he floated two years ago.

HLG owns a number of pub freeholds leased to, amongst others, Coles Group and National Gaming & Leisure. These were valued at more than one billion dollars in late December last year but new valuations are likely to be lower.

The trust owes $745 million to a syndicate of banks headed by ANZ.

Hedley Leisure and Gaming Property Partners chairman Colin Henson acknowledged that receivers and administrators had been appointed to various private companies owned by Hedley but said the HLG fund had not received any formal notification of the appointments.

“Media reports refer to the appointment of administrators to Hedz (a Tom Hedley private company),” he said. “That company is a tenant of 12 pubs in the HLG portfolio and contributes approximately 11.5 per cent of annual rent received by HLG.”

However Henson conceded that a preliminary review of its senior loan agreement with ANZ showed it was in technical breach of the agreement because Hedz had gone into administration.

HLG has requested a waiver from the banks in terms of both what it called “this technical breach” and has requested an extension of its $745 million bank debt beyond the August 2010 maturity date.

HLG shares were at 19 cents when trading was halted on Thursday (Jul 2), down from 27 cents on June 26.