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DFO South Wharf collapse to see receivers called in today

Direct Factory Outlets’ (DFO) failed South Wharf complex in Melbourne will see the insolvency firm KordaMentha called in as receivers for DFO owners Austexx as early as this afternoon.

Direct Factory OutletAustexx, who owns DFO is believed to owe $400 million over the failed DFO South Wharf development with banks concerned about their loans given the highly leveraged state of the DFO group. Austex earlier this year looked to sell DFO, but is believed to have been seeking $1.5 billion for the eight stores across eastern Australia, which was considered too expensive for potential bidders Lend Lease and Colonial First State who both operate retail property divisions given DFO’s $1 billion in liabilities they would need to service when buying it as a going concern.

Insolvency firm KordaMentha is expected to be appointed as receivers for DFO owner Austexx as early as this afternoon in order to reconcile Austexx’s books and prevent the DFO chain collapsing. Arnold Bloch Leibler partner Leon Zwier, on behalf of Austexx 50 percent owners David Goldberger and David Wieland, told News.com.au that they were seeking a solution to avoid Austexx collapsing completely.

Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel is reported in The Australian to be caught up in the DFO collapse, standing to lose more than $50 million he has invested in DFO owner Austexx through a blind trust.

“This is most distressing indeed because it affects the interests of my children and grandchildren as beneficiaries of my estate,” Mr Samuel told The Australian yesterday.

DFO’s South Wharf development in Melbourne’s Docklands precinct was to be the crown in the group’s ten shopping centres, departing from DFO’s traditional factory and clearance outlets for mainstream brands model that had underpinned DFO’s model previously, the South Wharf DFO aimed higher, seeking to attract more prestigious brands and ‘upmarket’ retail and fashion outlets. This departure from the bread and butter of DFO’s business until now, combined with delays in finance as banks grow concerned, in addition to planning and licensing delays with Melbourne council have seen the South Wharf DFO development stall.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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