Golf club rescue mission

SANCTUARY Cove owner Mulpha Australia is poised to buy back the resort’s The Palms golf course in a move intended to rescue the future of the elite Sanctuary Cove Golf and Country Club.

The move comes on the heels of members who pay more than $6500 a year in fees being told that by 2024 their club will be in financial distress.

The warning has come in a report from accountancy major KPMG, which a year ago was called in to examine the club’s membership model.

It has found the model is not sustainable and the club will be running in the red by 2023.

The club’s favoured plan to address KPMG’s “financial distress” forecast is to sell $11.5 million worth of assets, including The Palms course, the nearby hilltop Country Club, and 50 per cent of the maintenance sheds.

Mulpha Australia CEO Greg Shaw yesterday said that agreement in principal had been reached to buy the assets.

He said the club’s board had instigated talks with Mulpha more than a year ago over “significant challenges regarding the future”.

The Mulpha purchases are something of a buying back of part of the farm – it sold the assets, along with The Pines course, to golf members in 2007.

The move, which is subject to due diligence and a December 7 member vote, could come with immediate upside for members.

A single member could see a drop of more than $1000 in fees and charges.

A $5.3 million capital spending plan would include new greens on The Pines course.

Club president Mick McDonald said yesterday that The Pines would return to being “one of the best private and exclusive golf facilities in the country”.

Nearly 1100 members hold shares in the golf club, with Mulpha owning an additional 580, which it is intended will be cancelled.

The KPMG report suggests the number of shares on issue might drop to 800 and that those shares each would have asset backing of $25,836.

Membership numbers have been dropping and are forecast to fall further in the wake of an August Queensland Civil and Administrative Tribunal ruling that effectively said members could resign even if they could not sell their shares in the company that held the club’s assets.

Members, some of whom paid more than $40,000 for their shares, have been paying people thousands of dollars to take them off their hands.

Under the plan for the club’s future, they would be able to exit their shares for $1.