Bankstown airport developers go belly up
The company that was set up to convert about half of Bankstown airport to non-aviation commercial property following privatisation has collapsed, leaving a trail of confusion that case-hardened airport tenants describe as “unhelpful.”
Prime creditor CBA (Commonwealth Bank of Australia) has appointed liquidation practitioners Korda Mentha as Receivers and Managers for the debt-laden BAC Devco Pty Limited, the company formed to manage property development at the Airport.
Bankstown in busier times
Bankstown airport tenants say that about half the land covered by the Bankstown Airport Ltd (BAL) head lease was sub-leased to BAC Devco, a newly-formed associate company, on or about the same day the Commonwealth lease to BAL was finalised; and that at that time Leightons, Mirvac and the CBA were the major shareholders.
The sell-off of sub-leases on airport land involved some 28 commercial property sites on the airport, a handful of which (including Toll) are now either completed and occupied, with the remainder currently undergoing development or awaiting preparation for sub-lease to commercial tenants. The sites vary in size from less than half a hectare to 10 ha.
The move is expected to create a shambles of planned, finished or half-finished commercial real estate projects, many of which have already encroached on basic airport infrastructure. One runway has been de-commissioned, another is partly closed along with an adjoining taxiway, and although the resulting new sites remain unoccupied there have been grave reductions in available aviation movement space including runways taxiways, apron areas, and land available for future aviation project development.
Current property ownership on all three Sydney basin secondary airports is confused by a tangle of contradictory assertions by various stakeholders, at least some of which are clearly outdated.
Leighton Properties’ web site says the company holds a 33.3% stake in the leasehold development land at Bankstown airport, a 25% interest in the leasehold land at Camden, and a 50% stake in freehold development land at Hoxton Park airport. Hoxton Park was allowed to be shut down as part of a deal in which a single company was permitted to take over all three airports, contrary to provisions of the enabling Airports Act 1996.
But Mirvac’s site currently claims: “Hoxton Park Airport is wholly owned by Mirvac Developments Pty Limited and is managed and operated by Bankstown Airport Limited.”
Chairing the creditors’ meeting, co-administrator Mr Christopher Hill of PPB Australia said he understood that the only common shareholder to BAC Devco Pty Limited and Bankstown Airport Pty Limited was Westscheme Pty Limited, which apparently no Bankstown aviation tenant has heard of.
The first meeting of creditors was attended by just two organisations.
Civil engineering, planning and surveying firm Craig & Rhodes is claiming over $30,000 for work associated with the commercial sub-lease development at Bankstown, while the Australian Aviation Museum Bankstown Inc says it is owed $2.5 m, part of a planned $3.6m promised for the relocation of its facility from Bankstown to Camden as part of a deal with the now defunct BAC Devco to clear its Bankstown leas for other development.
BAC Devco directors had initially approached Mr Hill last November regarding placement of the company into voluntary administration, however that was not pursued when a sale program was put in place. But when the program failed and CBA withdrew funding on May 13, the company appointed Mr Hill and Mr Brett Lord as joint and several administrators.
The following day David Winterbottom and Martin Madden of Korda Mentha were appointed receivers and managers by CBA.
The administrators are investigating the company and will provide a detailed report to the second creditors’ meeting. That meeting will also be asked to pass a resolution on whether the company executes a deed of company agreement, or be wound up and liquidators appointed. However, said the Chairman: “Due to the appointment of receivers and managers to the company, the administrators would have limited involvement in the administration of the company.”
Creditors were told there would be no returns to them unless the sale of properties recovered funds in excess of what is owed to CBA, but total debt known to date is approximately $56 million.
Two Bankstown tenants were available for un-attributable comment:
“I wonder if government will get a message from this outcome, of its incompetence in managing airport privatisation. Probably not.” and:
“I don’t see any good news for airport tenants in this shambles, but maybe the whole thing might deter land sharks from messing around with things they don’t understand – especially airports and the people and businesses whose lives revolve around them.”
Sucked in! Leave the airports as airports and stop killing off the GA industry, especially MIRVAC! Greedy, corrupt, thugs!
These airports are vital for the nations national security and many other uses. It was absolutely stupid to mess with them due to greed and ignorance. This mess must be addressed by the Rudd administration or they will be defeated at the next elections like the previous Howard one. We fly and we vote….