Private lender Gemi Investments has warned investors it faces losses of more than $5 million after loans to former pub baron Jon Adgemis soured.
According to The Daily Telegraph, the Sydney-based fund, which lent at least $390 million to Adgemis’ distressed hospitality empire, said it expects no recovery on five venues and has made a full 100-cent-in-the-dollar provision.
Gemi’s troubles deepened after receiver McGrathNicol began selling the seized pubs, including the South Bondi Hotel, which could fetch up to $80 million. However, sources said Gemi is unlikely to see any proceeds.
The firm also revealed that 91 per cent of its loan book is tied up in legal or recovery disputes, with no performing loans and withdrawals frozen.
Adding to the pressure, Gemi has failed to secure auditor approval for its accounts and may face further write-downs despite a $5 million buffer.
The lender was among several private credit funds examined by ASIC, which found widespread compliance and disclosure issues in the $200 billion sector.
Source: The Daily Telegraph
