An investment firm associated with a former director of listed real estate firm The Agency Group has called in voluntary administrators over a disputed outstanding debt.
Magnolia Capital has appointed BDO as voluntary administrators to pursue the ASX-listed group for its outstanding secured debt to “protect the interests of creditors”.
In a statement, Sydney-based Magnolia said it has lost confidence in the board and the unknown financial position of The Agency, known on the securities exchange as AU1.
The move comes after Magnolia, a major shareholder of The Agency Group, made an unsolicited takeover bid of AU1 in December last year.
But in recent weeks its shareholders instead voted overwhelmingly for a deal with private company Peters Investments, an investment firm owned by notable Perth businessman and horse breeder Bob Peters.
Magnolia, which holds a 16.65 per cent share in The Agency, is associated with The Agency’s ex-director, Mitchell Atkins.
Atkins was a director of The Agency from 1 October 2019 to 8 May 2020, and had made a competing offer to the Peters Proposal.
On January 4, shareholders voted in favour of $5 million in new convertible notes to Peters Investments that would help support its debt obligations to Macquarie Bank.
The Agency Group spans more than 350 agents across New South Wales, Queensland, Victoria and Western Australia, serving both the commercial and residential sectors.
On Tuesday, Magnolia said that BDO has been appointed as voluntary administrator over AU1, not over any subsidiaries, which allows for an independent review without disrupting the trading businesses.
Magnolia said a security agreement was entered into in February last year.
“Despite raising additional finance and offloading assets, the debt remains outstanding after repeated demands for payment,” the statement said.
No comment on the outstanding debt figure was confirmed at time of publsihing.
In a trading update, the securities of The Agency Group were suspended from quotation immediately on the ASX under Listing Rule 17.3, pending the release of an announcement.