Suspended Elanor puts $160m of hotels up for sale in race to fix debt
Troubled fund manager Elanor has launched a $160 million sell-down of its best hotel assets, including luxury resort Peppers Cradle Mountain Lodge, as it battles to get its debt under control and resume trading on the ASX.
The clocking is ticking for Elanor ahead of a March 19 deadline to address part of its overall debt – its unsecured notes – which were carved out of a refinancing deal the ASX-listed fund manager struck in November.
Elanor went into voluntary suspension from the ASX in August and postponed filing its annual accounts. The company was juggling around $125 million in obligations overall – it breached a debt covenant two months later – and began looking for ways to refinance its debt.
An $85 million refinancing deal was secured with credit fund Keyview Financial Group last year but it did not include the group’s unsecured corporate notes. The noteholders agreed to a 90-day standstill on those obligations.
“Elanor is undertaking all requirements to recommence trading as soon as it is able to,” an Elanor spokeswoman said on Tuesday.
“Once the group’s unsecured corporate notes have been restructured – negotiations continue with Keyview and the arranger of the Notes – Elanor will be in a position to finalise its [accounts for the year] ended 30 June 2024 and will then request ASX to lift the suspension of Elanor’s securities.”
Properties sold
As part of it the restructure set out in August last year, Elanor said it would exit the hotels, tourism and leisure sector, including selling all the hospitality assets in its $450 million unlisted Elanor Hotel Accommodation Fund.
Four hospitality properties have been sold, worth $53.5 million, and three others are in due diligence. Elanor is stepping up the divestment program, putting a $160 million group of properties up for grabs.
Along with the $80 million Peppers Cradle Mountain Lodge, the latest tranche includes well-known destinations such as the 170-room Mayfair Hotel in Adelaide, which is worth around $90 million, and the $36 million Byron Bay Hotel. Also included are Mudgee Parklands Resorts for $23 million and Panorama Retreat in Victoria for $10 million.
Some of those sale proceeds will be returned to the listed Elanor parent group, which is itself an investor in the hotel fund.
Elanor said it waited six months to launch the latest tranche of properties to avoid flooding the market with hospitality assets.
“An orderly asset realisation process, structured in tranches, was adopted to deliver the best value for each asset and continues to progress well,” Elanor said in a statement.
Elanor has also moved to address the underperformance of some hotels and resorts on its unlisted hotel fund, tapping hotel operator 1834 Hotels to take over the management of some properties.
Separately to the hotel fund’s portfolio, Elanor has sold about $190 million worth of assets it directly owns, including Manning Mall and Northway Plaza.
