Pub group admits fallout from Tom Hedley’s collapse

Listed pub property fund Hedley Leisure & Gaming Property Fund has admitted that the collapse of the private empire of its founder Tom Hedley has caused it to breach its loan agreement, but insists it is “operating satisfactorily”.

HLGPF released a statement to investors emphasising that it is a separate entity from the Hedly Group, which collapsed into receivership with debts of as much as $250 million.

But there are some connections between the two groups. Tom Hedley retains a 60% stake in HLGPF and Hedley’s private pub business Hedz is a tenant in 12 pubs owned by HLGPF, contributing around 11.5% of HLGPF’s annual rent receipts.

Receivers are continuing to keep these pubs operating, which should mean HLGPF does not take too much of a hit in this regard.

However, the collapse of Hedley’s private empire has caused at least one problem.

“Our preliminary review of the senior loan agreement indicates that only one technical breach of the agreement has arisen due to the appointment of the administrator to Hedz Pty Ltd and we are requesting a waiver from the banks in respect of this technical breach.”

It appears that Hedley may attempt to restructure Hedz and keep control of his pubs. He has appointed Peter Morris and Todd Kelly of Foremans Business Advisors to examine restructuring possibilities with the aim of putting a deed of company arrangement to the creditor and getting the business profitable again.

Nowhere is the fallout greater from Hedley’s collapse than in his home town of Cairns. One unlikely victim could be the local horse racing industry.

Cairns Jockey Club committee member Greg Smith told the Cairns Post that Hedley had invested a substantial amount of time, money and in-kind support revitalising the local racetrack.

“You can’t underestimate what he did out there. He was very hands-on, he was unbelievable. What Tom has done for racing is his legacy to the jockey club.”