Fresh board for Lantern Hotel Group as Millinium gets way

The change in leadership follows a tumultuous period for Lantern, born out of the ashes of ING Real Estate Entertainment Fund, including the recent resignation of its chairman, Bryan Mogridge.

Lantern has a portfolio of about a dozen pubs, mainly in NSW, but has struggled to satisfy its major investors, including Millinium, that held a stake of about 24.7 per cent, and Allan Gray Australia, with around 17.2 per cent.

Yesterday, shareholders narrowly approved the removal of Mr Mogridge from the board, along with Russell Naylor and Deborah Cartwright, who will be replaced by John Murphy and Graeme Campbell.

Mr Campbell, a long-time pub industry consultant, said the first consideration for the new board would be to assess the company’s current position.

“What data the company has provided to date hasn’t been ­adequate for investors, and we’d like to conduct a detailed operational review in conjunction with our bankers,” he said.

“That should give us the way with which to move forward, ­because while we have good properties they are operating at a less-than-optimum level.”

Late last month, Julian Davidson, the sole director Millinium was not proposing to remove, ­admitted the rehabilitation process for the troubled pub operator would take some time, with some pubs receiving little capital expenditure over a sustained ­period.

“Unfortunately, hotels that are allowed to operate in this fashion attract a type of clientele that may inhibit future growth, making the venues unattractive to people with greater levels of disposable income,” Mr Davidson told shareholders.

The removal of Mr Mogridge and fellow directors follows an earlier attempt by Millinium to remove the entire board at last year’s annual general meeting amid allegations Lantern did not disclose a related party loan.

Those allegations related to the Pyne Gould Corp, that has a stake of about 34.2 per cent in Lantern, and is also chaired by Mr Mogridge, which managed the Torchlight investment funds that were caught up in the collapse of financial services firm van Eyke.

The claims, which were def­ended, involved a $500,000 loan made by Lantern to a company associated with Torchlight, which was then allegedly sold at a $240,000 loss to Torchlight Fund LP, which is headquartered in the Cayman Islands and is the largest shareholder of Lantern.

Yesterday, before its removal, the previous board recom­mended a share buyback, approved by the Administrative Appeals Tribunal after being rejected by ASIC, proceed.

But it is understood the company has yet to be notified as to whether ASIC will appeal, and could reconsider the proposal for the buyback of Millinium-held shares.

Source: The Australian, Kylar Loussikian, June 24^th 2015