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A high-profile Melbourne property developer that once had a $4.2 billion pipeline of projects has been called into receivership, with assets likely to be divested for offshore investors to recoup funds.
McGrathNicol Restructuring announced today three of its partners had been appointed as receivers for Development Steller Pty Ltd, a developer of residential and commercial property founded by Nicholas Smedley and Simon Pitard in 2006.
The appointments of Keith Crawford, Matthew Caddy and Jason Preston were made by OCP Asia, a Hong Kong and Singaporean-based financier which provided funding to the Steller group.
McGrathNicol says the appointments give it control over "a number of real property assets", including residential properties and land held for and under development.
Last week The Age reported refurbishments for the iconic Sorrento Continental Hotel had been left by the wayside due to Steller's unravelling.
The publication reported hotelier Julian Gerner, who had purchased the pub for $12 million two years ago and had partnered with Steller to renovate, was selling the property.
On Productreview.com.au, users alleged poor building practices and customer service from the group.
"Bought from Steller 2 years ago, now [sic] can't sell because cladding used has not passed inspection by Victorian Building Authority. Have only been notified of this days before the auction," one user wrote.
"During construction there were rarely qualified trades people onsite and when there was, at times they complained about having to supervise the many backpackers hired to complete the project," wrote another.
"We have now spent thousands of our own money trying to get these issues resolved whilst we wait in line along with the countless other Steller customers for legal channels to take their course."
McGrathNicol partner Keith Crawford says an urgent financial assessment is taking place for the assets under the receivers' control.
"We'll be working constructively with all stakeholders, including financiers of individual properties, to secure the best possible outcome for all parties," says Crawford.
"OCP Asia intends to support the assets over which Receivers have control during the receivership process, including via the provision of additional funding to ensure the assets can be maintained while options for recapitalisation, development and/or disposal are explored."
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