Another one bites the dust

CAPITAL Finance has pulled its funding for one of the region's up market beachside developments, forcing four Ray Group companies into receivership.

The Australian arm of the British Lloyds Banking Group, which suffered an ugly exposure to the Raptis Group's troubled Southport Central project in 2008, has refused to pour any more money into Salt Village on the Tweed Coast.

Capital Finance, which owns the remaining unsold lots in the estate, is understood to have inherited the assets through the collapse of MFS (since renamed Octavia) two years ago.

Salt Village was a joint venture between MFS and Ray Group, which has been acting as project marketer for the $750 million development for the past three years.

Ray Group chief executive Tom Ray, son of company founder the late Brian Ray, said his family retained 'no equity position in the Salt Village development assets'. It is understood the remaining lots owe Capital Finance which has funded Salt since 2002 about $33 million.

"We have remained with the project because we strongly believe in it and because we considered that we were the right people to manage its continued development in the best interests of the financier and in the best interests of the Salt Village community," said Mr Ray in a statement.

The four Ray companies placed in receivership are South Kingscliff Developments, Salt Developments, Kingscliff South and The Kingscliff South Discretionary Trust.

Mr Ray said that the receivership was isolated to only these companies and that remaining entities within the group were not affected.

Ray Group operates Ray Real Estate, Salt bar Beach bar and Bistro, Salt Cellars bottle shop and Salt Village IGA supermarket within the estate.

"The Salt Village commercial businesses are performing well, with no financial or security obligations to any bank or person," said Mr Ray.

"Salt Village has been and remains a good project.

"The fact that the financier has withdrawn funding to the development assets would seem to us to have nothing to do with the project, but perhaps it has to do with the financier's own issues and presumably a desire to repatriate funds from Australia."

A Capital Finance spokesman denied this was the case and that its decision was for 'purely commercial reasons'.

Mr Ray was in talks with receivers yesterday and could not be contacted for further comment.

A spokesman said that sub-contractors would not be out of pocket from the receivership as most of the development work had been completed for some time.

Only 10 per cent remains to be developed of the 73ha Salt project which will bring a total of 1500 homes to the market when completed.

The British financier has a major exposure to the Coast property market, including Southport Central and the Fish Group properties at Hope Island.

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