Direct Factory Outlet stores to be sold to repay $1 billion

Direct Factory Outlet (DFO) will be split up store by store and sold off to repay almost $1 billion owed to banks after development of the DFO South Wharf outlet stalled when cash dried up.

DFO owners Austexx, run by David Goldberger and David Wieland as reported in The Age will be forced to split up the nine DFO outlets to service the $1 billion owed to NAB, St George, Bank of Scotland International and Suncorp-Metway, made up of $550 million for the South Wharf DFO development and $450 million in other debts.

Australian Competition and Consumer Commission boss Graeme Samuel, is expected to fail to recoup the $50 million invested in Austexx via a blind trust once DFO’s operations are bundled up and sold.

Late last week a deal was struck between DFO’s David Goldberger and David Wieland and NAB, St George, Bank of Scotland International and Suncorp-Metway to roll over debt on the South Wharf DFO development in order to avoid a fire sale of the underdeveloped project and not realise the full value from the development. The four banks hope that holding off breaking up the DFO group will result in less losses for their investment.

SOURCE: dynamic business By David Olsen on Monday, 23 August 2010