Dear supporters,
I have responded to several letters and emails individually in regards to the sale of The Beach Hotel business, but I think it’s timely to address the broader supporter base on where the club sits right at the moment.
It is important upfront to understand that we lease The Beach Hotel premises to run the business (leasehold), but we do not own the actual building (freehold.)
Firstly, The Beach Hotel business and leasehold has been sold to a company in The Gauci Group, an organisation that runs hotels, gaming venues and restaurants.
The purchase price of $2 million is the exact figure that we have on our books in relation to the value of the business, after the write down that was made in 2008.
To complete the sale, the purchaser has to receive approval from Liquor Licensing and Victorian gaming authorities, which has been received.
The final step in the sale (which is normally a formality), is to obtain consent from the freehold owners to transfer the lease to The Gauci Group.
At this stage, the freehold owners are withholding their consent, based on the fact that they are seeking further information regarding the financial backing and business structure of The Gauci Group. All of this information has now been supplied and exceeds the normal financial requirements that a new purchaser would normally have to present to a freehold owner.
If the freehold owners continue to delay the sale, the issue will be settled by VCAT, who are the industry arbitrator. The club has already applied for a hearing date with VCAT and is awaiting notification of when that hearing date is.
There has also been some confusion over the last 12 months created by the freehold owners trying to sell the actual Beach Hotel building at the same time as we were selling the business. This is why it is important to make the distinction between the sale of the business that we own, in contrast to the sale of the building which the freehold owners own.
The club understands that the freehold owners are still attempting to sell the building. This sale process has nothing to do with the sale of the business, and therefore will not be allowed to hold up our sale to The Gauci Group which is why we have booked a hearing with VCAT.
At this point in time the only outstanding approval is the freehold owners’ consent which shall be resolved by either negotiation with the owners or by an independent decision of a VCAT tribunal member.
Hopefully this clarifies where we sit right at the moment and the challenges that are part of selling a gaming business. I will keep you up to date as the outcome unfolds but rest assured the club remains absolutely committed to completing the sale of The Beach Hotel business as per our original position.
If there are any further questions that you need answered please send your requests to ceo@collingwoodfc.com.au and I will respond again through the website.
Yours Sincerely,
Gary Pert.
CEO.
