Credit Connect, a major private lender to the troubled Sydney-based property developer Bathla Group, has ceased communication regarding its outstanding loans to the company. With outstanding loans totaling $203.8 million spread across 14 tranches, Credit Connect has become a significant financier amid Bathla’s ongoing financial distress. However, Bathla has drawn down nearly all of the amount, leaving just $25.3 million undrawn.
Headquartered near the Robina shopping centre on Queensland’s Gold Coast, Credit Connect has a history of backing suburban housing developments and providing mortgages to buyers unable to secure traditional bank financing. Since 2006, the lender reports it has issued $1.28 billion in loans across 515 transactions nationwide, primarily covering projects along Australia’s eastern seaboard.
Attempts to contact Credit Connect at two of its three offices were unsuccessful. A Melbourne-based solicitor who handles much of Credit Connect’s Victorian operations is reportedly selling his practice and relocating, while no response was received from their Sydney office in Milsons Point. When approached by phone, Credit Connect’s CEO Peter Benson declined to comment and warned against further calls, describing inquiries as harassment. Benson previously expressed frustration over coverage he felt misrepresented his comments.
Meanwhile, Bathla Group has also declined to discuss details of its financial arrangements with Credit Connect. Bathla spokesman Tim Allerton cited confidentiality agreements between the parties and expressed concern about potential publication of information based on what he described as confidential material.
Credit Connect’s involvement in Bathla’s financing deepened following a major refinancing transaction late last year. This restructuring arose after Sydney lender Alecon withdrew nearly $670 million in exposure to Bathla, ending an 18-year relationship with the developer and its founder, Bhart Bhushan. Prior to settling with Credit Connect, negotiations involved Melbourne-based Merricks Capital and Centuria Bass, both of which explored significant funding offers but ultimately did not finalize deals, partly due to Bathla’s strategic positioning of its collateral among different lenders.
Among Credit Connect’s loans to Bathla is a $74.4 million facility to support a large housing development on Richmond Road in Marsden Park, Sydney, which reportedly still has $23.4 million available. Internal documents indicate Credit Connect’s loans were intended to finance 908 dwellings within Bathla’s portfolio of nearly 14,900 townhouses and apartments. Only 199 of these units have been pre-sold, suggesting Credit Connect could face responsibility for marketing and selling the remaining properties should Bathla be unable to complete the developments.
Additional lenders to Bathla have intervened to maintain operations on certain projects, including paying staff and suppliers. The group has brought in external builders to continue construction after subcontractors reportedly ceased work due to unpaid invoices. Although several land sale agreements have been arranged recently, insiders indicate settlements are not expected for several months.
Some lenders have raised concerns regarding the accuracy of valuations provided by Bathla. These concerns prompted a report to the Australian Securities and Investments Commission (ASIC) relating to the adequacy and reliability of information disclosed to creditors. The developments underscore the complexity and sensitivity surrounding financing and asset management at Bathla amid its ongoing financial challenges.