Riverside landowner CRK Holdings in Wagga real estate asset sale plan to cover part of debt

CRK Holdings was placed in administration in August last year and still owes a total of $22.6 million to 141 unsecured creditors.

Creditors were told in November that CRK's administrator was offered $1.6 million for the Riverside development block on Sturt Street, but did not pursue the deal as there were three other interested parties.

Administrator Chris Chamberlain told The Daily Advertiser that creditors had approved a plan to hand more control of CRK back to its directors to enable an asset sale.

"Creditors won't get back 100 cents in the dollar, sadly, which is always going to be the preferred option, but you can only deal with the situation as you can," he said.

CRK also owns multiple Wagga properties that have retail tenants.

Mr Chamberlain said CRK had moved to a deed of company arrangement, which is an agreement between creditors and a business used to recover debts, wind up a company or bring it out of administration.

"The creditors have put the control back, to a degree, in the directors' hands, overseen by myself and what you'd call a committee of creditors, to assist in the orderly wind down and sale of all assets which includes the Sturt Street development site" he said.

"Hopefully, at the end of the day the outcome won't be 100 cents but we're hoping to achieve close to 40 cents on the dollar."

The $21 million Riverside development, which features 67 residential units and three commercial spaces, was approved by Wagga City Council in early 2020.

In May, PRD Wagga claimed to have broken the city's residential price record with pre-sales of $1.8 million and $1.9 million for Riverside penthouse apartments.

Mr Chamberlain said CRK's director "has the capacity to negotiate a solution which may include another party coming forward and offering a joint venture" to complete Riverside project as part of a sale.

"This is all about trying to get a best case scenario for all of the investors and creditors as opposed to just fire selling it in the current climate," he said.

"Nobody has a crystal ball but all options are being explored."

CRK director Paul Kahlefeldt met with Mr Chamberlain on July 6 seeking advice, and advised him the company was experiencing cash flow difficulties related to a lack of progress at Riverside and a loss of rental income due to the COVID-19 pandemic.

Between August and November, administrators received $3.3 million for CRK through rent, cash holdings and selling off shares in other companies, and paid out the same amount to secured creditors, ongoing business expenses and administrator costs.

The administrator's spending included repaying more than $2.08 million to the National Australia Bank and $447,000 to a commercial lender in Sydney.