Elanor Investors Group reported a $24.5 million net loss for the half year to December 2024, grappling with debt covenant breaches and defaults. The group has struck a $125 million recapitalisation agreement with Rockworth Capital Partners to stabilise its balance sheet and pursue growth.
- Half-year net loss of $24.5 million
- Debt covenant breaches led to defaults on senior debt and corporate notes
- Asset realisation program generated $38.3 million for debt reduction
- Secured $125 million recapitalisation deal with Rockworth Capital Partners
- Acquisition of Singapore-based Firmus Capital to expand Asian footprint
Financial Performance and Challenges
Elanor Investors Group (ASX: ENN) has revealed a challenging half-year financial performance, posting a net loss after tax of $24.5 million for the six months ended 31 December 2024. This compares to a $23.9 million loss in the prior corresponding period, underscoring ongoing operational and financial pressures.
Revenue from ordinary activities declined to $66.9 million, down 7.5% from the previous year, while core earnings deteriorated further. The group faced significant headwinds including increased borrowing costs and impairments on equity accounted investments.
Debt Covenant Breaches and Defaults
During the period, Elanor breached several covenants under its secured debt facility and corporate notes, triggering defaults. The breaches were disclosed to lenders in October 2024, but no formal waivers were obtained, giving lenders rights to demand immediate repayment.
As a result, the group's $70.6 million Keyview senior secured debt facility was classified as a current liability and was in default due to cross defaults linked to corporate notes and other managed fund covenants. The group also faced missed repayment milestones in March and June 2025.
Asset Realisation and Refinancing Efforts
To address its financial position, Elanor embarked on an orderly asset realisation program, divesting interests including a 12.6% stake in the Elanor Commercial Property Fund for $23.9 million and selling several properties such as Cougal Street and assets within managed funds. Proceeds of $38.3 million were applied to reduce the Keyview facility.
In October 2024, the group refinanced its senior debt with Keyview Financial Group, securing a new $85 million facility with staggered repayments through 2025. Despite this, defaults persisted, prompting extension arrangements with Keyview into 2026, conditional on progress with recapitalisation and asset sales.
Strategic Alliance with Rockworth Capital Partners
In a pivotal development, Elanor entered binding terms with Rockworth Capital Partners in July 2025 for a $125 million recapitalisation package. This includes a $70 million senior secured debt facility at 7% interest, $55 million in perpetual subordinated capital notes with discretionary coupons, and 30 million unlisted warrants exercisable at $0.01.
The Rockworth investment aims to fully repay existing senior debt and corporate notes, reduce commercial liabilities, and provide working capital. The recapitalisation is contingent on regulatory approvals and securityholder endorsement, which was secured at an Extraordinary General Meeting in February 2026.
Expansion into Asia via Firmus Capital Acquisition
As part of the Rockworth alliance, Elanor agreed to acquire 100% of Singapore-based Firmus Capital Pte. Ltd., a real estate investment manager with approximately AUD $782 million in assets under management. This acquisition aligns with Elanor’s strategy to expand its presence in Asian markets, focusing on retail and office sectors.
Operational and Governance Changes
Elanor has also simplified its business by unwinding its strategic partnership with Challenger, terminating related mandates and distribution agreements. The group is focused on core sectors including retail, office, healthcare, and leisure, while implementing cost management initiatives and strengthening corporate governance.
The group’s auditor issued an unqualified review report but highlighted material uncertainty regarding Elanor’s ability to continue as a going concern, reflecting the precarious financial position and reliance on successful recapitalisation and asset divestments.
Outlook and Strategic Focus
Looking ahead, Elanor aims to leverage the Rockworth investment to stabilise its balance sheet, reduce gearing, and pursue growth opportunities, particularly in the Pan Asian region. The group is also advancing its climate-related financial disclosures and sustainability initiatives in line with Australian standards.
Despite the challenges, management remains committed to executing its strategic plan to create a capital-light, scalable funds management business capable of delivering long-term value to securityholders.
Bottom Line?
Elanor’s next chapter hinges on the successful execution of its recapitalisation and asset sales amid ongoing financial uncertainty.
Questions in the middle?
- Will the Rockworth recapitalisation fully resolve Elanor’s debt covenant breaches and defaults?
- How will the acquisition of Firmus Capital reshape Elanor’s growth trajectory in Asia?
- What impact will the loss of the Elanor Commercial Property Fund mandate have on future earnings?