Sale of CMS - Update
An earlier circular advised owners that the Hope Island Resort Principal Body Corporate (PBC) had received advice from Mirvac Limited (Mirvac), on behalf of Cambridge Management Services Pty Ltd (CMS), that Esquire Property Group (EPG), a company formed by the principals of Bright & Duggan Pty Ltd (B&D), had entered into an agreement with Mirvac for the purchase of the national CMS business.
The PBC Management Agreement between CMS and the PBC includes a provision that if the Manager is a corporation having shares not listed on any Australian stock exchange then the Manager must obtain the consent of the PBC before there is any alteration in the effective control of the Manager.
In considering the proposed sale, the PBC must not unreasonably refuse, withhold or delay its consent if the purchaser is reputable, responsible, suitably qualified, experienced and financially capable to fulfil the duties under the Residential Body Corporate Agreement. This same clause is also contained in the new Residential Body Corporate Agreement entered into between CMS and a majority of the Residential Bodies Corporate within Hope Island Resort.
The PBC Executive Committee advises that representatives of both EPG and Mirvac recently attended a PBC Executive Committee Meeting where a presentation was given to all Executive Committee Members. Following this presentation, the PBC Executive Committee sought an independent legal opinion from McCullough Robertson Lawyers in relation to the process required to obtain consent to the change in ownership.
The advice provided by both McCullough Robertson Lawyers on behalf of the PBC, and Minter Ellison Lawyers on behalf of Mirvac, confirms that the current PBC Management Agreement between CMS and the PBC requires the PBC to consent to a change in control of CMS. It is noted also that this same provision exists in the Residential Body Corporate (RBC) Agreement entered into between CMS and several Residential Bodies Corporate within Hope Island Resort
In order to ensure that the EPG meet the criteria under the change in control clause, members of the PBC Executive Committee reviewed all documentation provided and presentations made by B&D, EPG and Mirvac. As a result of this review, the PBC Executive Committee has advised that it is satisfied that EPG satisfy all consent requirements contained within the clause and therefore that there are no grounds to withhold consent.
One of the matters the PBC Executive investigated was the financial capability of EPG, as an associate company of B & D, to manage the Hope Island Resort Bodies Corporate activities.
Currently B & D have under management, on behalf of their Body Corporate clients, property worth in excess of $10billion and current annual body corporate expenditure of over $70million.
The shareholder/directors of EPG are Phillip Duggan, Trevor Bright and Adrian Emery. Phillip Duggan and Trevor Bright are the owners of Bright & Duggan. Adrian Emery is the CEO of B & D.
B & D have confirmed that they will act as guarantor for the Esquire Property Group. Further, members of the PBC Executive Committee have been given the opportunity, on a confidential basis, to examine the ‘Commercial Facility Agreement’ between the St George Bank and EPG, which confirms the guarantee by B & D over EPG.
For your information and consideration, copies of the following documents are available on this Website. We encourage you all to read these documents:
