Banks deal saves South Wharf DFO

Trustees for Australian Competition and Consumer Commission chairman Graeme Samuel, an investor in Austexx, approved an agreement last night.

Mr Samuel's trustees, Andrew Kroger and Guy Jalland, had been holding back on agreeing to a bailout because they were seeking compensation for the propping up of projects in which Mr Samuel has no stake with assets in which he has invested.

But last night the trustees withdrew their objection after striking a confidential deal and the bulk of the rescue package was signed by all four banks, owed $450 million secured against the struggling South Wharf project.

National Australia Bank, St George, BOSI and Suncorp-Metway will provide finance to complete the stalled construction of South Wharf, which may then be sold.

"We are pleased that all banks, partners and directors have unanimously endorsed the senior management of Frank De Rango and I, and the strategy we have been on for six months to recapitalise these great assets," said chief executive Geoff Porz.

He declined to comment on Mr Samuel's concerns about the company's borrowings.

The deal frees Mr Porz to concentrate on dealing with the remainder of Austexx's debt of about $1 billion, which is believed to be hurting otherwise profitable shopping centres.

Company documents show Homebush, one of the chain's most successful centres, owes up to $200 million.

Mr Samuel has given a "limited guarantee" of Homebush's line of credit through family company Lyngrae, loan documents show.

It is believed Mr Samuel is not concerned by the guarantee, despite learning of it only yesterday, because the Homebush centre is worth far more than the loan.

He is believed to be livid about other loans worth hundreds of millions of dollars.

But his trustees are believed to be unlikely to sue because they feel there is little prospect of recovering his investment, worth $25 million to $30 million.

A lawsuit would be difficult because of his role as ACCC chairman.

Loan documents show Austexx borrowed up to $100 million in March, secured against the successful Essendon DFO in which Mr Samuel is an investor.

And a loan of up to $180 million drawn by South Wharf, where Mr Samuel is not an investor, is secured against the Spencer Street shopping centre in which he holds a stake. Because his affairs are handled by trustees to avoid conflicts of interest, Mr Samuel became aware of Austexx's debt problems only last month.

Two of his trustees, Mr Porz and union stalwart Bill Kelty, resigned about the same time. It is believed Mr Samuel no longer speaks to Mr Porz, who signed many of the loan papers.