Adgemis weighs Public Hospitality break-up; HK hedge fund lurks – The Australian Financial Review

Is it last drinks for Jon Adgemis’ Public Hospitality Group, the pub and hotel roll-up that has been attempting to refinance $450 million in debt for months? The former KPMG dealmaker is considering splitting the portfolio, which includes Sydney’s The Strand Hotel and others, sources said.
Street Talk has been told that Adgemis is no longer working with KPMG partner and head of real estate Tony Moussa, who had been leading the slated refi. There has been plenty of activity on this front, as this column reported in July. Credit funds and institutional debt investors with an appetite for hospitality-focused real estate assets have all been canvassed.
Adgemis Edwina Pickles
No luck, so far. Now Adgemis is in talks with a credit fund who would lend to the venues that are not yet open while the other pubs, which are already trading, would have to secure financing from another creditor.
Public Hospitality Group has been buying unloved pubs and hotels, primarily in Sydney and Melbourne, and now owns about 22 properties includes Noah’s backpacker hostel at Bondi Beach. It’s 100 per cent owned by Adgemis – although investors from a $40 million convertible notes raising in February last year would be keeping a close eye. That includes Alex Waislitz’s Thorney Investment Group who cornerstoned the round.
The group has good pubs and hotels, but is saddled with high debts following a purchasing binge from Adgemis. That has left him with several options, including divesting some of the assets in the portfolio.
Macquarie, Public Hospitality Group’s main lender, has made it pretty clear it wants out. Another senior lender, Archibald Capital, has been doing the rounds with Adgemis. No doubt it is somewhat concerned of its position behind Macquarie in the lending group. If it all goes south – and there is no suggestion that it will as yet – Archibald will be left with little.
According to Rear Window, the group valued its properties at $750 million in May – higher than the $400 million to $450 million valuation thrown around in its 2022 capital markets trip, when the Reserve Bank had yet to embark on the rate rises that have thrown the property sector into disarray.
Given Adgemis’ profile, there are plenty in the marker watching to see what happens next. Last year, Public Hospitality Group was talking about an IPO.
Then there’s Punit Patel and Brian Lee, two senior Davidson Kempner Capital Management operators who have been onshore visiting from Hong Kong earlier in the month. The hedge fund met with some of Public Hospitality Group’s lenders, sources said, although no word yet if anything came of it.
The next two weeks are shaping up to be critical for the one-time rainmaker. Adgemis might be paying the price for spending up too freely when times were good – but then again, he’s kept it all ticking together so far.
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