Developer Bensons offers unpaid creditors chance to stump up again
Bensons Property Group, which repaid unsecured creditors as little as 0.14 of a cent in every dollar under a turnaround scheme to lift it out of administration, is now giving those creditors a chance to improve their return – by putting more money into new development projects.
The company earlier this month took back control of its affairs after owner Elias Jreissati secured the support of 99 per cent of creditors, for a turnaround that documents show offered just 0.14¢ in the dollar to unsecured creditors owed a collective $400 million.
It is now offering those same so-called compromised investors – who made up just under half of the company’s total $813 million in debts – the chance to invest in two new funds, a debt fund worth $30 million and an equity fund worth $20 million.
“Our commitment to provide opportunities to stakeholders will be our priority over the short term,” Bensons chief executive officer Rick Curtis said. “We have the capacity and expertise to deliver for all concerned.”
The company last week reinvented itself as a development manager, being paid a fee to develop sites for landowners – although they may be special-purpose vehicles headed by the same directors – rather than taking on development risk itself.
The first site it plans to develop with the new funds is a 4509-square-metre site at 194-204 Lorimer Street in Melbourne’s Docklands.
Jreissati, also the owner of winery Levantine Hill Estate in Victoria’s Yarra Valley, and Bensons chief financial officer Michael Dickson acquired the residential site in a deal advised by Marshall White’s Leonard Teplin.
The sale price wasn’t disclosed but the Bensons directors paid less than the $22.5 million Samma Property Group director Simon Abdelmalak, paid in 2021, sources said. Abdelmalak declined to comment.
Bensons said it started due diligence on the site that already had a permit in place in the fourth quarter of 2024. The directors put the development company into administration on December 27, the day a fund managed by Macquarie Private Bank’s former head Guy Hedley tipped it into receivership.
The company had a development pipeline of more than 1000 apartments when it went into administration.
“We believe this site represents a high-quality residential development opportunity and we anticipate announcing further details in due course,” a spokesman said.
Bensons said the Lorimer Street project would have a maturity period of three to four years.
But while all compromised creditors can have their debts transferred into the new fund at no cost, they will rank after other creditors who put fresh funds into the new vehicle and whose additional funds will receive, documents show, a minimum coupon payment of 8 per cent.
A Bensons spokesman said the company had already enough indicative commitments from creditors wanting to participate to make the development feasible. Not all were keen to put more money in, however.
“It’s just so brazen,” one creditor told The Australian Financial Review on Monday. “You get shafted in the deed of company arrangement but [they say] ‘Here’s a chance for you to invest more money at our discretion that we will pick a development and invest in them and then just hope for the best’.”
A number of compromised creditors are Chinese. The report to Bensons creditors the KordaMentha administrators published in English before the second creditors meeting on February 7 was 151 pages long. The report sent to investors in Mandarin was 10 pages long.
“We are committed to providing opportunities for our stakeholders and believe Melbourne remains an attractive market, offering affordability that is increasingly rare in other capital cities,” the Bensons spokesman said.
“Our stakeholders expect that our capacity and expertise is leveraged to deliver more housing stock in a market that sorely needs it.”
