Buyer may lose $45m with Eynesbury deal in jeopardy

A $60 million deal to sell the vast Eynesbury estate in Melbourne’s west looks in jeopardy after listed developer Villa World issued a default notice to the Malaysian-backed buyer, potentially forfeiting $45 million already paid.

Villa World said in a notice to the Australian Stock Exchange  on Tuesday it had issued the default order to Hyde Property Group, controlled by Melbourne apartment developer Francis Kwong, which will terminate the sale contract unless it is fully settled by  October 13.

Villa World struck the deal to sell the undeveloped portion of the estate, as well as the Eynesbury Golf Course, in November 2013.

Hyde director Russell Jackson said the transaction was not in jeopardy.

“We will ensure that we settle prior to the end of the default period,” Mr Russell said.

The deal to take over the residential development and golf course first hit a snag in March this year when Hyde was expected to pay a second tranche of $30 million, having already paid a $30 million down payment in June 2014.

Hyde stumped up only $15 million of the second tranche and was forced to negotiate a new settlement date with Villa World at an increased price of $33 million.

Villa World developed part of the 1250-hectare house and land residential project in a joint venture with the landowner, the Woodhouse Pastoral Company, controlled by one of Australia’s richest families, the Baillieu family.

The deal with Villa World appears to be complicated by a secondary transaction between Mr Kwong and the Chinese property giant Country Garden to onsell the project to Country Garden for a speculated $200 million.

Country Garden did not respond to a request for comment. 

Fairfax Media reported in June that Country Garden was in final negotiations to buy the residential project but it is not known if the deal was concluded.

“That’s not out of the frame at this stage,” Mr Jackson said.

Villa World’s managing director, Craig Treasure, said the company had issued a statutory notice of default to the purchaser.

“We have issued a notice and we’re calling for settlement within the next 14 days,” he said.

Failing that, the contract will be terminated and the previous payments will be forfeited and become the absolute property of the Eynesbury joint venture, he said.

The Baillieu family recently put the remainder of the estate, a massive 5000-hectare portion of farmland, on the market.

The landholding, called Woodhouse Station, is being sold by the Woodhouse Pastoral Company, part of the family’s Mutual Trust investment vehicle which purchased the 7500 hectare cropping and grazing property in 1947.

KPMG and Biggin & Scott are marketing the land with potential for food production, an agricultural education centre or a residential community requiring a $11.3 billion commitment over 25 to 30 years.