Tourism company Stella Group has angrily denied news reports that it may be placed in receivership, and says the company is “trading as usual”.
Stella is the owner of the Harvey World Travel chain of travel agents and also operates the Breakfree, Peppers and Mantra holiday accommodation brands.
A report in The Australian suggested private equity firm CVC Asia Pacific and investment bank UBS have lost up to $1 billion after buying two thirds of Stella last year from collapsed Gold Coast property and finance business MFS.
The paper also reported that “accountants close to UBS has recommended the bank place Stella in receivership, or sell assets immediately”.
But Stella released a statement this morning saying it is “trading as usual and rejected outright any suggestion a recommendation had been made to appoint receivers to the group”.
“Speculation in The Australian newspaper this morning is unequivocally and completely false. The article contains various factual inaccuracies,” a spokesperson said.
“It’s business as usual at Stella, we are working for the benefit of all suppliers, franchisees, customers and unit owners that the company represents.”
MFS expanded its Stella business in 2005 with the acquisition of management rights operator Breakfree, owned by entrepreneur Tony Smith, for around $300 million.
A year later it acquired another management rights business, S8, from entrepreneur Chris Scott in a $700 million deal.
As both deals involved cash and MFS scrip, both entrepreneurs suffered heavy losses when MFS collapsed last year.
Stella said in its statement that it has a “good working relationship with its banker UBS”. The company says it is continuing to work on an “appropriate and prudent long-term capital structure for the business”.
Related story:
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
Comments