Insolvency group places Australian restaurant giant Keystone Hospitality Group under receivership

In late 2013, Tourism Australia launched a new international campaign with the theme Restaurant Australia by focusing on the country’s food and wine industries to target global foodies and wine connoisseurs. There could be less good restaurants after insolvency group Ferrier Hodgson placed under receivership one of the biggest hospitality groups in Australian with about 20 dining establishments, bars and pubs.

News.com.au reports that failure by the board of the Keystone Hospitality Group to reach an agreement with lenders on key aspects of its financial structure resulted in the company placed under receivership. Keystone owns six Jamie's Italian restaurants in Sydney, Perth, Canberra, Brisbane and Adelaide. It also owns 17 other famous dining establishments such as Cargo Bar in Sydney, Bungalow 8, The Winery and Gazebo and Kingsley’s in Brisbane and Chophouse in Perth.

Keystone’s assets could be sold as a whole or broken up, says Ferrier Hodgson, the insolvency group. But these businesses would continue to trade while the receiver assesses each site and brand for ultimate sale, says Morgan Kelly, the receiver, in a statement.

Among the assets expected to start selling within the next three months is a new Jamie’s Italian restaurant on King William St in Adelaide. The less than two-year-old restaurant would be subject to review immediately. But whether the assets are sold individually or as a group, it would retain the Jamie’s Italian brand, Kelly assures diners.

Richard Facioni, executive, and John Duncan, managing director of Keystone, blames the problems of their business to Sydney’s lockout laws and money used to expand two years ago. The debt as well as changes in the local market significantly strained Keystone’s finances.

The estimated value of Keystone’s business, which has about 1,000 employees, is about $100 million. Kelly adds that with the current hospitality market buoyant, he expect a lot of interested buyers especially since the businesses are some of the most iconic and well-known brands in their markets, reports Business Insider.

VIDEO: Jamie Oliver opens Jamie’s Italian Restaurant in Sydney