Receivers for troubled office development Raine Square say project financiers Bankwest and Bank of Scotland gave the developer, Westgem Investments, ample opportunity to meet its debt obligations, but Westgem chief Luke Saraceni says Bankwest would not discuss refinancing options.
Kordamentha partner Mark Mentha added that the debt issues were not new developments, and that proposals put forward by Mr Saraceni were not suitable.
"The banks gave the group every opportunity to sell assets to meet its obligations," Mr Mentha said.
"The problem is not recent. There were extensions to the bank funding facilities throughout last year.
"If a suitable proposal had been put forward, it would have been accepted. The receivership provides certainty and confidence for all stakeholders."
In a statement released yesterday, Mr Saraceni labelled the receivership unnecessary, arguing that the Raine Square project, which is 80 per cent complete, funded for completion and the office component fully leased, retained strong financial metrics.
Mr Saraceni added Bankwest ignored numerous proposals by Westgem to restructure the debt.
"Over a number of months, Westgem had tried to engage with the security holders to progress a range of commercial proposals designed at reducing the banks exposure to this project and refinancing the associated debt," the statement said.
"The security holders did not at any time engage with Westgem in relation to any of these proposals generated by Westgem, the majority of which Westgem considered would have generated additional returns to the security holders."
Bankwest appointed receivers to the $500 million project yesterday after Westgem missed a $50 million debt repayment on December 31.
