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Centuria Unit Explores Sale of A$278M Bathla Group Debt at Potential Discount: Report
Centuria Bass Credit, a unit of fund manager Centuria Capital Group, is exploring the sale of its debt exposure to the collapsed Sydney-based developer Bathla Group, according to a Bloomberg News report citing people familiar with the matter. The firm has reportedly held discussions with potential investors, though a deal is not considered imminent.
Details of the Potential Sale
The report indicates that some prospective buyers are seeking significant price reductions on the debt assets. According to one person cited by Bloomberg, potential discounts are at least 20% to 30%.
In a statement, Centuria Bass declined to comment on specific discounts. The company said it would "assess opportunities to maximize outcomes for investors" as it actively manages its exposure related to Bathla Group.
Centuria's Exposure and Background
Centuria Bass disclosed in a prior announcement that it holds A$278 million in debt to Bathla Group. This debt is secured against a portfolio of six residential development projects located in Victoria and New South Wales.
AdAmid intensified scrutiny of its exposure, the credit unit also took the step of temporarily pausing redemptions from two of its investment funds last month. The move was intended to manage liquidity as the situation with the insolvent builder unfolds.
Broader Market Context
The potential debt sale follows the collapse of Bathla Group, which appointed Teneo Australia as a voluntary administrator in August after it was unable to service its debts. The developer owes approximately A$3.4 billion to its creditors, a significant portion of which is held by private credit funds.
The situation has drawn attention to the risks within Australia's rapidly growing A$200 billion private credit market. According to the Australian Securities and Investments Commission (ASIC), about half of the assets in this sector are linked to real estate development, highlighting a concentration of risk in the property sector.
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