Coast property group collapses

by Tony Moore | September 10, 2008 - 4:03PM

A creditors' meeting is underway on the Gold Coast following the collapse of the Raptis Group, which had debts of more than $700 million.

Receivers Korda Mentha, who oversaw the Ansett Airlines collapse, were appointed by finance company Capital Finance, a subsidiary of the massive finance company HBOS, after the Raptis Group could not repay loans.

Capital Finance is reportedly owed $700 million by the Raptis Group.

The Raptis Group, headed by developer Jim Raptis, is one of the Gold Coast's most prominent development firms and had built more than 30 skyscrapers in the area in the past 30 years.

The firm called a halt to its trading position this morning and is expected to soon make an announcement to the Australian Stock Exchange.

Mr Raptis is understood to be seeking funding alternatives.

Tony White, president of the Gold Coast North Chamber of Commerce, said a lot of jobs will be lost as a result of the collapse.

"I have heard that a lot of the contractors have not been paid for quite a long time," Mr White said.

"I have heard that it has been several months in some instances."

He said there would be a loss of confidence in the local construction and development industry.

"It is going to mean the loss of a lot of jobs - and the loss of confidence - and the loss of a lot of community confidence," he said.

It is understood 200 construction workers walked off Raptis's three-tower Southport Central worksite this morning.

Raptis is also developing the $700 million Hilton Hotel project in Surfers Paradise.

In a statement this afternoon Mr Raptis blamed the global credit crisis for the difficulties facing his firm.

"These are tough economic times," Mr Raptis said.

"The current global credit crisis is having an extraordinary impact on many businesses, and Raptis is no exception."

Mr Raptis confirmed that Korda Mentha had been appointed receivers by Capital Finance Australia Limited to "certain controlled entities" associated with the Southport Central project.

"We have earnestly explored every avenue to protect the interests of our staff and subcontractors and regrettably the financier has decided to take this position," Mr Raptis said.

"I, and my management team have conveyed to Capital Finance and the receiver, Korda Mentha, our sincere hope that they will continue to seek the outcomes that reflect these wishes."

Comment was being sought from Hilton Hotels Corporation.