In the wake of uncertainty around Jon Adgemis’ Public Hospitality Group, stakeholders and associates of the Hellenic Club of Sydney have raised concerns over its future since it joined the portfolio.
Jon Adgemis was a senior partner at KPMG until 2018, and has since invested heavily in hospitality, gathering around 20 venues. Investments in the venture have been sold on the basis that many of the venues were predicted to see major increases in valuation, through renovations adding accommodation.
Brokers pitched loans to investors based on completed works and assuming valuations reflecting the presumed uplift. Public took on heavy debt during a period where high interest rates were hurting many, including consumers.
More loans were secured to meet existing obligations and continue the strategy, leading to reports many hotels held caveats and some have up to four mortgages, but trouble truly began for Public when many of the renovations fell behind schedule.
Early 2024 there was a lot of talk about a refinancing deal with American private equity players Bain Capital, but this fell through, and Public continued to pay almost 12 per cent interest on debts, with some charging up to 18 per cent.
Staff and suppliers were being left unpaid, the Australian Taxation Office lodged a tax default notice in April for $10.7 million, and lenders began circling the wagons, looking to sell off assets. A mooted sale of the Empire Hotel of Annandale was withdrawn the following week, and both an apartment block in Bondi held by Angas Securities and Manor House in Darlinghurst through Millbrook passed in at auction.
Facing the fallout of PHG’s $500 million in debt, at the end of May came news the group had secured a $400 million refinancing deal to save his floundering hospitality gambit, with conditions. The agreement with major lenders Deutsche Bank, Gemi Investments and Archibald Capital was understood to require a new and experienced general manager to oversee operations.
There is funding earmarked to pay staff, suppliers and creditors, and around $30 million allocated to the completion of several of the re-developments.
Amid the financing frenzy, PHG acquired and in January assumed operations at the Hellenic Club of Sydney’s Alpha and Beta venues, reportedly edging out competitor bids from the likes of the Dedes Waterfront and Doltone House groups. Furthermore, celebrity chef and former MasterChef judge George Calombaris took up residence within Alpha in March.
The shortfall between Public’s new financing and its existing obligations is expected to be met by new funds arising from the sale of some of the portfolio, thought to include the Melbourne pub assets, and as many as eight overall.
The Hellenic Club was established by a group of Greek shopkeepers in inner Sydney in 1924.
Club members and the wider Greek community have reportedly questioned how and why PHG was chosen, and are rightfully concerned about both the club’s financial stability and the broader impact on its reputation and ongoing activities.
A spokesperson for Public was unable to provide ClubTIC details prior to publication on which assets will be sold.
