Holiday ends for Mariner resort fund

The Mariner Coastal Investment Trust was closed down last week, with the impact of the financial downturn taking its toll on the four Australian east coast resorts held within the fund.

Paul Billingham and Said Jahani of Grant Thornton were appointed receivers and managers of Mariner Leisure Management and Mariner Coastal Operations by the Commonwealth Bank of Australia (CBA) late last week.

Mariner Leisure Management is the management company of Mariner Coastal Investment Fund. This company, as well as four assets on the east coast of Australia, is held within the unlisted satellite fund. Mariner Leisure Management shares are stapled to units in the Mariner Coastal Investment Trust, which is also held within the Mariner Coastal Investment Fund.

While Mariner Leisure Management and Mariner Coastal Operations are not subsidiaries of Mariner Financial, the latter does have a subordinated loan (already written down) of $10.8 million to the Mariner Coastal Investment Trust, according to the group’s statement to the Australian Securities Exchange. Mariner Financial will now fully impair this loan, the group said.

The group said the intentions of Grant Thornton regarding the sale of the assets held by the Mariner Coastal Investment Trust is as yet unknown. As such it is also unknown what proceeds will be available to security holders in the Coastal Investment Fund.

The appointment of receivers and managers comes following extended negotiations between the fund and the CBA, with the bank unwilling to refinance the loan underpinning the fund.

The fund has been hit by the reduction in consumer discretionary spending, which has hurt the performance of the tourist resorts in the fund.