14/02/2011 - 14:11

Receivers seize another Saraceni asset

14/02/2011 - 14:11

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Receivers for embattled office development Raine Square have seized another Saracen Properties asset in Subiaco, after the sale of Saracen's neighbouring property was settled last Thursday in deal worth around $67 million.

Receivers seize another Saraceni asset

Receivers for embattled office development Raine Square have seized another Saracen Properties asset in Subiaco, after the sale of Saracen's neighbouring property was settled last Thursday in deal worth around $67 million.

KordaMentha partner Mark Mentha said he had been appointed receiver for 500 Hay Street, Subiaco, on Friday afternoon, as the asset was listed as a guarantor for the Raine Square project.

Mr Mentha said the appointment came after the sale of neighbouring 502 Hay Street was settled on Thursday, for around $67 million.

It is understood Malaysia-based entrepreneur Ming Ng was behind the purchase.

Mr Saraceni said the seizure was expected once the settlement of 502 Hay Street was reached.

"We knew the moment that settlement took place that they were going to grab the asset because its only got a very, very small debt on it of about $700,000 and its probably worth about $20 million," Mr Saraceni said.

"We knew the bank was going to grab that as soon as they could to feed it into Raine Square.

"Its money they don't need to finish Raine Square, but they have documents that give them the ability to grab it anyway, and they're grabbing everything they can."

Also, Mr Mentha said he had lodged an interlocutory injunction at the Supreme Court, for the return of $1.3 million that was transferred out of Raine Square developer Westgem Investments accounts a day before receivers were appointed.

Mr Mentha said he had seen no evidence of the money being placed into a trust or escrow account, and he would continue efforts to get the money returned through the Supreme Court on Wednesday.

Mr Mentha filed a writ in January for the return of the money, alleging it was illegally transferred.

Mr Saraceni said last month that the cash remained sitting in a Saracen Properties bank account, and that he was waiting to go to court to get an interpretation of who it belongs to.

Raine Square financiers Bankwest and Bank of Scotland appointed KordaMentha as receivers to the $500 million tower in January, after Westgem missed a $50 million debt repayment on December 31.

Mr Saraceni has maintained that the project was seized from Westgem's control invalidly, and that he would mount legal action as soon as possible.

In January Bankwest also appointed receivers from Ferrier Hodgson to Saraceni-associated entities Seaport, which owns the Bayside City Plaza shopping centre in Warrnambool; Newport Securities, which holds a 40-hectare property near Margaret River; and Mayport Nominees, which holds strata retail units in Spearwood.

Each company is a guarantor to the Raine Square development, and Newport Securities and Mayport Nominees have provided second mortgages to Westgem's joint financiers, Bankwest and Bank of Scotland International.

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