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2009
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2003
ING pub fund cans dividend
Sydney Morning Herald
Thursday June 18, 2009
THE debt-laden listed pub fund ING Real Estate Entertainment Fund is running so low on cash it has told investors it will not pay their June distribution payment.The company blamed a fall in earnings at one of its "significant tenants", but did not name the group.The fund has 25 pubs in Australia; its largest tenant with nine pubs is Icon Hospitality Group, owned by publicans Peter Wynne and Damien Reed.Icon closed its Evening Star Hotel in Sydney's Surry Hills in March amid falling earnings.Last month the fund sold two hotels worth about $20 million in an attempt to cut its debt.The fund argued that by holding on to the money it would be better prepared to withstand pressure from its bankers to keep cash levels high enough to clear restrictive debt covenants.The leaseholder of at least one of the fund's pubs is already in trouble. The MJ Finnegan's Irish Pub in Newcastle, leased by the solicitor-cum-property developer Brien Cornwell, is facing a wind-up application launched by the Australian Taxation Office.The fund reduced its distributions in December, and yesterday's decision was the first time it has decided not to pay the distribution at all.It had hoped to pay 5.5c a unit for 2008-09, which includes payments made this month and last December. This time last year the fund paid a distribution of 5c a unit.In February the fund reported an 8 per cent decline in operating profit to $6.9 million over the half year to December 2008 after a $1 million provision for "doubtful debts".Shares in the company fell 7c to 15c yesterday.The fund's senior management declined to return the Herald's calls.
© 2009 Sydney Morning Herald
