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Retail & Hospitality

Howard’s Home Storage is one of the leading specialist retailers in home and office storage systems with a network of 58 owned and franchised stores.

As part of a proposed sale of the business the company had entered into agreements to acquire the franchise stores that it did not own, the sale did not proceed and as a result, the franchise network began to underperform, and unable to reach an agreement with its banks appointed an administrator to the Group.

We worked with the Group’s founders on a Deed of Company Arrangement.

Retail Adventures was a retail chain of 1,000 discount variety stores across Australia operating from three national distribution centres.

The company was operating under three state brands the most recognisable was the small retail brand of “Crazy Clarks” and the big box format “ Sam’s Warehouse”. Over 15% of the portfolio was loss-making a the commencement of the programme.

Over 6 months we consolidated operations in tow distribution centres in Brisbane and Melbourne, consolidated into 2 national brands, closed 150 stores and renegotiated the leases on a further 500 stores. The restructured group was sold back to its main shareholder for less than the value of its secured debt with networking capital funding through an inventory of $22m.

Ellery is a luxury Australian fashion brand with design offices in Paris and Milan and production facilities in Sydney.

Less than 5% of global sales were generated in Australia through a local shopfront and wholesale clients.

An assessment of the business and costs of manufacturing identified a failure in the budgeting process of production. We identified that 15% of the costs of production was double handling of products and sample in transhipment. A further 12% of goods were damaged as a result of poor quality control and manufacturing in the Australian supply chain.
Our solution was radical, we closed all Australian operation and negotiated a license agreement with an Italian agency to relocate manufacturing to Italy.

The changes provided working capital for the on-going business, settled the secured debt and provided for an orderly sell-down of inventory over 12 months. Overall production costs were reduced by 20% and the founder Kym Ellery was able to focus on design and marketing as a licensed brand.

Olvera principals were appointed as Voluntary Administrators of the Keystone group.

The Group comprised 42 Companies and numerous unit trust and discretionary trust structures which operated 17 hospitality venues nationally. Keystone had over 1200 staff and creditors claims in the liquidation totalled over $85mill.

The Keystone hospitality venues included bars (Cargo Bar, Bungalow 8, The Rook), restaurants (Jamie Oliver restaurants, Kinsleys Steak Restaurants, Chop House Restaurants)  and licenced venues (Sugar Mill Hotel, Newtown Hotel) located across Melbourne, Perth, Sydney, Brisbane and Canberra.

Keystone had borrowed over $70m from an offshore hedge fund syndicate (managed out of Singapore and USA) to fund a group restructure. The lender syndicate took security over all of the property of the company other than the leasehold assets. A significant proportion of the company property (which were leasehold trading entities) was excluded from the security.

The appointment of Administrators was triggered by the Syndicates decision to appoint receivers over the group. Olvera advisors worked collaboratively with the Receivers to stabilise immediate trading and worked together to achieve going concern sales of all but one of the Groups businesses Olvera principals were appointed Administrators and played a key role in facilitating the ongoing trading operations to facilitate going concern sales of the venues. Recoveries from liquidator actions resulting in a dividend to unsecured creditors.

Mining & Industrials

Olvera principals were appointed as Voluntary Administrators and subsequently Liquidators of a Mining Company (formerly ASX listed)

with operations/investments across multiple jurisdictions including Africa, UK, Europe and North America. Olvera Advisors sought to extract value for stakeholders from the assets of the Company. Olvera Advisors have undertaken a:

  • Financial Assessment of the historical trading performance of the Company;
  • Operational Review of director and management performance;
  • Divestment/Realisation Strategy, including a successful International Sales Campaign to divest a wholly owned subsidiary undertaking mining operations in Europe. Such strategy in part provides for a staged performance based recovery;
  • Statutory Recovery Strategy, including a material claim into an External Administration of its mining operation in Africa;
  • Statutory Recovery of an uncommercial transaction;

The liquidation is ongoing and remains in a monitoring phase as to the outcome of implemented realisation and recovery strategies.

Olvera principals were appointed liquidators of North West Crane Hire Pty Ltd which operated a mining plant & equipment crane hire business based in Mt Isa, Queensland.

Olvera principals undertook a recovery and realisation strategy of all the mining equipment. Liaised with various secured parties including major financial institutions in regards to the safe retrieval and sale of assets. Olvera Advisors undertook the sale of the company’s mining equipment including mobile cranes mining vehicles, assorted mining related plant and equipment and real property.

Completed investigations in respect to potential voidable transactions and breaches of director duties.

Solargex was one of Australia’s largest national solar panel distributors and installation companies with its head office in Southport Queensland which collapsed in 2012.

Olvera principals acted as expert witnesses undertaking a financial assessment of the operations of the Solargex business which included assessments of its operations and supply contracts both in Australia and the United States.

Our work resulted in a subsequent settlement of the underlying litigation.

Media & Entertainment

Select TV was the regional cable network service owned and operated by WIN Corporation Australia’s largest television broadcaster.

Olvera principals assisted in the sale of the metropolitan subscriber base to Foxtel and Austar and agreed on settlements with its media distribution partners over a 6 month period.

We then acted as deed advocate placing the company into administration and settling residual claims through a deed of company arrangement.

Olvera principals were involved in the overview and management one of NSW leading NRL teams based in Sydney.

We negotiated the acquisition of the 50% interest in the club from shareholders and restructured the related club debt through a debt consolidation.

The acquisition also involved the settlement of funds owing to the NRL.

The acquisition put both clubs back on a stable financial footing.

Olvera principals acted as advisors to WIN Corporation in the restructure of Nine Entertainment and proposed acquisition of the business as part of a debt for equity swap.

Olvera principals worked with Mezzanine lenders and their advisors, and distressed investors who acquired positions through a syndicate sell down.

Financial Services

Olvera principals were appointed as Liquidators by the Court to wind up the responsible entity for a mortgage fund The Summit Mortgage Fund

that raised funds to fund property-backed secured commercial loans. The total loan portfolio had a book value of over $100mill on the date of the appointment as liquidators. Our role was to undertake a realisation strategy for each of the loans in the portfolio, many of the underlying security properties were partly completed and in some cases construction building work had stopped some years ago due to the lack of funding.

As Liquidators, we commenced actions concerning negligence claims against valuers on eight loans. We successfully commenced claims for indemnity in relation to capital insurance.  As a result of the above actions, approximately $20mill has been returned to creditors.  .

Olvera principals were appointed as Voluntary Administrators of a company that operated 63 retail shopfronts

and operated in the business of short-term money lending but struggled with its business debt. Olvera advisors successfully continued to operate the business under the Voluntary Administration process under licence.

Olvera Advisors worked closely with company executives and together we successfully completed a business restructure through the Voluntary Administration process. The business restructure meant that the significant retail footprint able to be retained – staff employment opportunities maximised, loan book collected, and business debt reduced.

Olvera executives were engaged as Corporate Advisors to the board and senior management on working capital head room

including the consolidation of cash from subsidiaries to central treasury functions.  Olvera executives worked to maximise cash for covenant testing after the company share price fell by more than 25% resulting in a technical breach of facilities.

Recognising the fundamental role of cash culture within a business results in a more effective application of free cash, lower administrative costs, reduced borrowing needs and improved investment performance overall.

Olvera principals worked closely with the board, management and treasury teams to ensure cash forecasting and management methodologies are tailored to each individual business situation.

BBY Limited was the largest independent brokerage house in Australia and New Zealand until its collapse in 2015.

Olvera acted as adviser to AIMS Group who acquired the residual business of BBY through direct purchase and through a number of deeds of company arrangement which allowed AIMS to maintain the companies AFSL.

The acquisition allowed AIMS to grow its consumer client base by 30,000 active clients.

Olvera principals were appointed as Liquidators to 14 companies in the Octaviar Group.

The group consisted of 100 companies. The Group operated a vast array of businesses that ranged from property funds, corporate finance lending, child care centres, aged care facilities, funds management, ski and holiday resorts, travel, tourism and hotels.

These groups businesses were predominantly in Australia but there were also notable interests in New Zealand investment schemes and investment and advisory services in Dubai.  Creditors were in excess of $1.5billion.

Investigations were hampered by the complexity of the group – there were over 400 entities and intercompany loans totalled over $500m. The loans were convoluted and documentation largely unsubstantiated. Investigations included approximately 60 days of public examinations of key executives, personnel and advisers.  It also involved reviewing and investigating a significant volume of documentary material including:

Investigations focused on the following complex litigation issues:

  • Claims against the US-based lender resulted in the commencement of several proceedings in a foreign jurisdiction (US Bankruptcy Court).
  • Some of those proceedings found their way to the Second Circuit (for example: Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013);
  • Investigations into the conduct of the Auditors including dividend declarations, significant year end transactions, asset and revenue recognition and related entity transactions;
  • Significant transactions with creditors giving rise to unfair preferences;
  • Breaches of directors’ common law and statutory duties including a transaction that included $210mill in funds transferred inappropriately from a Managed Investment Scheme; and
  • Recoveries in the Liquidation estate exceed $300mill.

Property & Construction

Appointed Receivers and Managers over eight blocks (or stages) of land in the Salt Development.

The appointment was by the Pacific Alliance Group (Hong Kong) who had the top secured debt. Pacific Alliance Group appointed an agent in Australia called in the Winton Group which managed large parts of the Receivership.

The Receivership involved devising realisation strategies or the remaining uncompleted land development stages. As the receiver, we successfully engaged consultants to assist us to amend the construction certificates for the development stages and to develop and subdivide the remaining development stages. The subdivision was successfully remarketed and resulted in a very impressive realisation value of the land stock. In addition, we were able to successfully apply the GST margin scheme resulting in an increased return to the secured creditor.

Olvera Advisors were engaged by a hedge fund out of Hong Kong to assist with the realisation of a significant commercial loan that was in default.

Wija leased vacant land site in Chatswood that had a 99-year term. The Development Application on the land stipulated that it was to construct a 10 storey mixed residential/commercial complex within a specified timeframe.

Unfortunately, Wija did not commence the project within the time frame and consequently a breach notice was issued by the respective local Council which gave the secured creditor 6 months to rectify. Before the notice period expired, Olvera Advisors were Appointed as receivers. As receivers, we disputed the right to terminate the lease. In particular, we consider that the lessor was not allowed to terminate without giving the secured creditor 6 months to rectify the breach. To rectify the issues, we commenced proceedings seeking from the court for relief against Forfeiture and the leaseback and damages.

After nearly 12 months of legal proceedings, both sides are irresolute in the stance. All offers made by PAT to settle (including significant compensation) are rejected by the lessor.

Receivers receive an unsolicited offer from an interested party offering to purchase the property for a significant sum  with the intention of building out the existing DA.

Olvera Advisors as receivers then entered into put and call option with the interested party and were able to resolve litigation at the mediation and sell the lease and generating a significant return to the secured creditor.

Tom Hedley sold his Hedley Hotel Group to Coles Myer in 2006 for $328 million.

The Queensland portfolio counted 35 hotels, 102 retail liquor outlets, and sites for a further 17 botteshops, significantly boosting Coles’ expansion.

Tom Hedley went on to form Hedley Leisure and Gaming later renamed Redcape Property Group (RPG), and operational entity Hedz, which worked 12 of Redcape’s assets.

Hedley Construction was a group of development entities based out of Cairns which designed and built low rise residential accommodation. It also held a controlling state in Redcape Hotel Group which owned.

Olvera principals worked with the company owner Tom Hedley on a restructure of his entire group and its facilities with ANZ Banking Group.

Olvera principals were engaged by the secured creditor of a group of eight centres

to review the corporate structure and provide recommendations for performance improvement to the working capital management. Olvera Advisors undertook:

  • A comprehensive review which measured the business against industry drivers and success indicators
  • Rating of the business profitability variables – which led to the identification of significant, and disproportionate, rent costs
  • Preparation of business enhancement approaches in operational areas and rent review to improve cashflow

Continued monitoring over a period of 12 months and ongoing reporting to secured creditor regarding the financial performance of the centres.

By delivering swift and practical performance management solutions, we successfully assisted with the centre’s returns in line with industry averages. Centre profitability and business value improved significantly, and the bank was provided with a far more viable LVR. The increase in overall value resulted in the sale of one centre and reduced the business debt to a viable position.

Ringfencing solvent subsidiaries of an ASX listed entity which had been placed in liquidation

in order to preserve the value of the operations of a group of 40 childcare centres. Rather than liquidating the business on in the traditional way, we implemented a realisation plan that was calculated and measured to focus on preserving value in the group.

Our role, as liquidators included overseeing the ongoing operational and financial management aspects of the group of subsidiaries that operated the centres, including licencing compliance, and staff management and mix. We implemented operational performance management processes which successfully allowed the group to continue to operate as normal for a short period of time and to whilst undergoing a group divestment program to be implemented.

Prior to the liquidation, the group was valued at $1. Olvera’s principal’s thoughtful approach to preserving value in a time of crisis generated significant benefits to stakeholders. At the end of our engagement and after the divestment of the business the group was able to repay its secured creditors in full (over $35mill) and provided a return to its holding company of over $30mill.

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