The Keystone Group receivership – Lockouts not solely to blame

On 28 June 2016 Morgan Kelly and Ryan Eagle of Ferrier Hodgson were appointed Receivers and Managers to the Keystone Hospitality Group.

In a joint statement, Richard Facioni, Executive Director Keystone, and John Duncan, Managing Director Keystone, clarified the company’s position.

“Two years ago The Keystone Hospitality Group undertook a major expansion program, including acquisitions, to become a significantly larger, national group.

“Keystone today is an operationally strong business with over 1,000 employees across the country, with a number of iconic venues and brands within its portfolio and a highly dedicated team.  However, the debt raised to undertake its expansion, combined with changes to the local market, including lock out laws, have placed significant financial strain on the business.  As a result, the senior lenders to Keystone took the decision today to appoint receivers to the group to pursue a sale process.

“All our venues will continue to operate as usual and Keystone’s management will be working closely with the receivers during this process to ensure minimal disruption to the business and to ensure a successful outcome to the sale process.”

The venues included in this appointment are: Bungalow 8, Cargo Bar, Chophouse Perth, Chophouse Sydney, Gazebo, Jamie’s Italian Sydney, Jamie’s Italian Perth, Jamie’s Italian Canberra, Jamie’s Italian Brisbane, Jamie’s Italian Adelaide, Jamie’s Italian Trattoria, Kingsleys Brisbane, Kingsleys Woolloomooloo, Manly Wine, Sugarmill Hotel, The Rook, and The Winery.

The Group has been placed into receivership by a syndicate of lenders due to an inability to reach agreement with the Board on key aspects of the Keystone Group’s financial structure.

Receiver Morgan Kelly said the venues will continue to trade on a business as usual basis while the Receivers assess each venue in preparation for a sales campaign.

“Given the current buoyant hospitality market we anticipate a lot of interest in the sale of the venues.

“The venues in the Keystone Group comprise some of the most iconic and well-known brands in their respective markets.

“The sale of the group represents a unique opportunity for the right operator and is particularly suited to hospitality specialists interested in expansion.

“The sale process is expected to commence shortly,” Mr Kelly said.

As a first step, the Receivers will review all of the operations and identify what, if any, changes will be required prior to commencing the sales campaign.

It is likely that the sale process will offer the option of the sale of the entire group or on an individual asset basis.

Interested parties in the sale of the venues should contact Phil Quinlan of Ferrier Hodgson.

Mr Kelly said employees will continue to be employed on the same terms and conditions as prior to the appointment of the Receivers.

“For employees, venue operations and customers, it is business as usual as we undertake the sale process,” Mr Kelly said.