“Let me guess, you’re calling for our friend Jon,” sighs one of his affiliates in exasperation. By now, everyone who works in pubs and hotels knows the fate of Jon Adgemis. Probably the same can be said for anyone working in finance, an industry in which the entrepreneur was once KPMG’s most no-nonsense trader.
After leaving the company in 2018, Adgemis has put his deal-negotiating skills to use to build an empire that stretches from St Kilda’s Saint George’s restaurant, opposite Karen Martini, to Maybe Sammy, Sydney’s famous CBD cocktail bar. He also designed a long list of lenders and a pile of debts that reached $700 million, according to several creditors.
Earlier this month, after lengthy negotiations, Bain Capital officially subsidized a $500 million refinancing of Public Hospitality Group after Adgemis was unable to provide a $2. 5 million bond demanded through the personal equity firm. As the Australian Financial Review revealed this week, Deutsche Bank has emerged as a potential last-minute saviour. But there is no safe settlement and many other people owe a lot of money.
Jon Adgemis (right) with one of his lenders, Lance Rosenberg of Gleneagle Securities, in 2022. The Strand in Darlinghurst is owned by the Public Hospitality Group. Edwina Pickles
Adgemis hasn’t exactly become a small target. A favourite of gossip columns, Agemis, from M&A spouse to “the city’s new playboy baron”, has been documented in detail through journalists from the Daily Mail and The Daily Telegraph. The same is going for his sumptuous vintage yacht, Hiilani, his black Maserati, the personal helicopter trips to the Melbourne Cup, and the plethora of stylish brides (and their Hermes Birkin bags).
And as negotiations continue between PHG and its lenders, tension begins to creep in. Employees claim that they are not paid their pensions, some suppliers do not readily accept cash on delivery: one establishment, which does not seem to be able to unload a fuel connection, has started marketing LPG cans.
If Adgemis gets its refinance, it may simply create long-term PHGs, in the same way that Justin Hemmes’ Merivale overcame its early debt turmoil and a hospitality giant. If that fails, many other people will be left destitute and in need of revenge.
No one questions Jon Adjemis’ cash-grabbing skills and his skill with the lasso. “He’s the most productive conversationalist I’ve ever heard in my life – he has a knack for small talk, he makes you feel like you’re being heard. ” says a former Adgemis associate. ” He might just convince you to paint for him, unless you’ve painted for him before. “
Adgemis, who grew up in Sydney’s eastern suburbs, became a partner at KPMG at just 28 years old. “Jon was a very wise banker, clients enjoyed him – he was sweet, very wise and very connected,” says one banker. At the time, he was close to Bruce Gordon, the Bermuda-based businessman who owned WIN Corporation and who had a significant stake in Nine Entertainment (the publisher of The Australian Financial Review).
“He was also incredibly ambitious and had outgrown investment banking. That was because I was hoping to do something big,” the banker added.
That big company was Public Hospitality Group, which bought off-Broadway pubs that weren’t popular, renovated them, added a fancy dining spot and upstairs hotel rooms, and quickly turned a profit. Perhaps one of the first signs that something was wrong was an early dispute. between Adgemis and Gordon when, in 2021, the billionaire filed a $6. 4 million lawsuit against a company known as the Eastern Property Alliance. The two men eventually reached an out-of-court settlement.
At the time, Adgemis had tapped into the more expensive segment of the lending market to secure the cash needed to fund its growing portfolio of bars and the innovations that were part of the business plan.
For example, one of the biggest backers of Agemis is Gemi Investments, run by George Fleming and Justin Epstein. The organization promotes its loans to investors at very high interest rates.
In the case of Noah’s Backpackers in Sydney’s Bondi, which has yet to be remodeled, Gemi announced the $5. 8 million loan granted to Adgemis at 16. 5 per cent from investors with a line fee of 2. 2 per cent. But the loan gained an additional rate of five percent in the event of default after six months.
The date of the deal was November 2022, meaning it could have defaulted and been subject to an interest rate of more than 20% for 10 months while Noah’s was closed. Insiders describe a chaotic process in which Adgemis first sought to turn the asset into a hotel in two months, and staff went so far as to order slippers for guests, only to tell them that attention had shifted elsewhere.
Gemi said Egan National Valuers valued the Noah’s Backpackers property, which sold in 2022 for $68 million, at $103. 5 million “as if it were finished. “The loans are secured by mortgages, but, as with many homes in Adgemis, they are used by several lenders. As collateral.
In May, Noah’s Backpackers had 3 mortgages. He now has a fourth opponent: Geoff Lord’s Belgravia group. It also has two reservations about Dexit, a company related to IOUpay’s David Halliday, and Bizcap, which describes itself as “the most open lender” in Australia.
For example, Ben Madsen of Archibald Capital, one of Adgemis’ lenders, took control of the company that owns El Primo Sanchez last year. But the assets themselves are mortgaged three times: to the Australia Pacific Mortgage Fund, a fund backed by Thorney. Gleneagles trustee of Lance Rosenberg, and Gemi. It is subject to 3 other reservations.
“Archibald Capital financed the progression of the asset and kept the business as collateral. This investment has been repaid and we are in the process of taking the business out to the public,” an Adgemis spokesperson said. “We have other agreements with other lenders. However, our lenders support the group.
Fleming, played by Gemi, on the other hand, is optimistic. “We’re very confident that in the next few weeks we’ll get things right, Jon,” he says.
Investors had to reassure themselves through Adgemis’ wealth, which Gemi said amounted to $40 million. Other lenders had a much more positive view. In a filing, Millbrook said he valued more than $200 million.
For now, Public Hospitality Group organizations are doing everything they can to keep the company afloat. In some places, workers pay for their own supplies. Several vendors put the organization on “cash on delivery” after invoices have been paid for months.
Many employees, both present and external, say the situation is damaging their reputation and relationships in a small industry based on non-public brands. “People didn’t need to be the point of contact for any purchase, otherwise you’d be chased [by creditors],” says one former employee.
“It’s an unprofessional way of operating. “
Osteria Puttanesca is directed by Guy Grossi and is owned by Jon Adgemis’ PHG. The fuel cylinders are stacked outside. Elke Meitzel
Some workers became even more furious when they discovered that their retirement pension had not yet been paid. Some reported it to the Australian Taxation Office. Ashley Goren, 25, who works at PHG’s Empire Hotel in Sydney’s west central city, says her pension went unpaid from July to March this year.
Liquidity disruptions have made it more difficult to redevelop some of PHG’s assets. In several sales options in Sydney and Melbourne, the brands were withdrawn.
“There has been a dispute with the builder over the [Clifton Hill] project and it has been resolved,” the Adgemis spokesperson said. “Other projects have been put on hold pending the restart of PHG’s capital structure. “
The company denied that it had not paid a pension. The company says it has reached an agreement with the tax government and is in normal contact with the ATO “to make sure they can get their full pension rights as soon as possible. “
The arrangement detailed through PHG is known as the Retirement Guarantee Rate, which according to the tax government applies “when employers fail to pay the minimum amount of the super guarantee. “
Many PHG executives have already made their way to the door. As Agemis’ empire grew, he recruited several former Crown Resorts employees, casino manager Peter Crinis.
Today Crinis no longer exists. David Stoddart, PHG’s former director of finance and sales, left the company at the end of last year. Italian chef Alessandro Pavoni, of Crown Sydney’s a’Mare and Ormeggio at The Spit, is no longer PHG’s culinary ambassador. Pavoni will run the restaurant venue in a remodeled PHG venue, Balmain’s Town Hall Hotel. It doesn’t move forward anymore.
Alessandro Pavoni is about to open a restaurant in a pub owned by Jon Adgemis. Brook Mitchell
The upheavals have also hit close to home, in Sydney’s tight-knit Greek network. Late last year, Adgemis took over Alpha, the Hellenic Club’s high-end restaurant in Sydney’s CBD. of Kastellorizo, the Greek island where former Dow chairman Andrew Liveris and the Paspaley family live.
At Alpha, led by George Calombaris, some wonder if Adgemis risks going out with his own network if something goes wrong. In fact, there’s a problem. The Adgemis spokesperson stated that “a reconciliation of deposits held through the Hellenic Club for bookings and occasions that will take place after the transition is currently underway. “”The parties finalize the withheld amount and after conciliation, the notable balance will be settled. “It will be resolved within the next week,” he added.
Despite his negotiation skills, Adgemis doesn’t have the most productive track record when it comes to hospitality. Café Brass is their first company in the industry. The company closed its doors just six months after Adgemis invested in billionaire Alex Waislitz and wealthy Antony Catalano, leaving them with no pockets, along with their developers, suppliers and employees. The company’s only general suggests a 27-year-old hotel employee.
“Despite the mistakes of the past, other people continue to give him money,” says a former Adgemis employee. “That’s his talent. “
Want to know more? Send an email to primrose. riordan@afr. com.
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