Plan to save Mills financier

Administrator of Brisbane-based Omega Holdings, the financier behind the Mills housing project in New Norfolk, have backed a plan to save the company.

As exclusively revealed by the Derwent Valley Gazette on the 26th July, Omega Investment Holdings PL was earlier last month placed into administration. 

Under the proposed Deed of Company Arrangement, unsecured creditors to the company will receive between 6.5 cents and 15 cents in the dollar.

A Deed of Company Arrangement is designed to enable a restructure of a company to facilitate its ongoing trading ability, while ensuring a company can manage their creditor’s claims through a formal arrangement. 

Details of the proposed Deed of Company Arrangement have been revealed in a new Administrators’ Report to Creditors, prepared by SV Partners in Brisbane, issued last week. 

That report offers insight into the complex arrangements involving individuals and companies and the cross-business dealings and loans that underpinned the New Norfolk project, among others.

Among seven real estate funding arrangements identified, four involve various elements of The Mills development.

The report lists 77 unsecured creditors, including a number in and around the Derwent Valley.

In its executive summary, the report says: 

“The reason for Omega’s failure was due to non-payment of outstanding debtor amounts from related parties” a year prior to the appointment of Administrators, which occurred in July this year.

The report indicates the company’s financial situation was also impacted by delays in obtaining an audit report which resulted in action by Australian Securities and Investments Commission, (ASIC) which in turn interrupted cash flow. 

The documents points to under-capitalisation and a lack of working capital as well as non-lodgement of documentation with the ATO as additional contributing factors.

Launched in 2021 with a detailed planning report to secure zoning approvals, The Mills proposal was billed as a major renewal project for the Derwent Valley.

The site is a triangular area bounded by the Lyell Highway as it enters New Norfolk, and Glebe Road and Poulters Road on the hillside above.

In addition to the large number of homes – more than a quarter of New Norfolk’s existing housing stock – the proposal also included a market, hospitality and tourism, as well as significant medical and aged care elements. A large central park was also included.

Before the financial collapse of the arrangement, a third of the proposed 700 homes were completed.

Creditors to Omega Investment Holdings’ will meet and vote on the proposal for a Deed of Company Arrangement on 20th August.