The Hellenic Club of Sydney has announced ‘mutual agreement’ with Jon Adgemis’ Public Hospitality Group for PHG to cease operations immediately, to be replaced by Dedes Waterfront Group.
After a high-flying career with KPMG, Adgemis invested heavily in hospitality, amassing a portfolio of around 20 venues, most looking to major increases in valuation through strategic capex, with investment deals spruiking the assumed higher values.
Throughout a high interest period also putting the squeeze on consumer spending, further loans were secured to service existing obligations and keep growing, leading to reports many hotels hold caveats and some have up to four mortgages.
The early indications of trouble came when many of Public’s ambitious renovations fell behind schedule, and in a further sign of internal conflict, late 2023 partners Love Tilly Group announced the end of its partnership with PHG, citing “we can no longer, in good faith, continue to run our venues together with Public”.
Talk of a refinancing deal with Bain Capital private equity fell through, and Public continued to pay almost 12 per cent interest on debts, with some mezzanine debt at 18 per cent. Meanwhile staff and suppliers were not being paid and in April the Australian Taxation Office lodged a $10.7 million tax default notice.
And yet early 2024 PHG was announced as the new operator at the Hellenic Club of Sydney’s Alpha and Beta venues, reportedly chosen ahead of Dedes Waterfront and Doltone House groups, and in March celebrity chef and former MasterChef judge George Calombaris joined the team at Alpha.
PHG spoke of a refurb for Alpha, bringing a new bar area and other attractions.
But the Club members and broader Greek community soon began questioning why PHG was selected to run the venue, this year celebrating a century since its establishment by a group of Greek shopkeepers.
Last month news came of progress in the fallout of PHG’s $500 million in debt, with word that the group had secured a $400 million refinancing deal – with conditions – through Deutsche Bank, Gemi Investments and Archibald Capital. The arrangement is thought to require a new and experienced general manager be appointed to oversee operations, and the shortfall would require divestment of some un-named assets in the collection.
The new money was too late to keep group culinary director Clayton Wells on board, and at the same time, key stakeholder Australia Pacific Mortgage Fund assumed control of PHG venues El Primo Sanchez and the Kurrajong Hotel at Erskineville.
In response, a PHG spokesperson explained the group is “continuing to explore divestment of non-core assets”.
It has been suggested up to eight venues in the group will be sold off, including the Melbourne assets.
So it was that on Monday (17 June) the Hellenic Club of Sydney issued a joint statement with PHG outlining that they had mutually agreed that the pub group would exit, to be replaced by Con Dedes’ outfit, known for successful Sydney restaurants such as Flying Fish.
The statement offered that Public had advised its new financing is focused on company-owned real estate.
Handover at the Hellenic Club began this week and Calombaris is said to be assisting with this over coming weeks, although it is unclear if he will stay beyond that.
Con Dedes told the Greek Herald “we are honoured to have been entrusted with this beautiful asset”.
Ending a tumultuous six months, a PHG spokesperson said they enjoyed their interlude with the Hellenic Club and wish them “every success” with what comes next.
