Primelife

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Primelife Corporation Limited is an Australian company that constructs, develops, owns and manages retirement villages and other senior living facilities. it is listed on the Australian Stock Exchange and has a market capitalisation of $160 million. The company offers pre-sold developments and sells units to prospective residents and manages those facilities for a fee.

Primelife has 56 operating retirement villages and aged care facilities across Australia and New Zealand as at November 2005, with fourteen new projects under construction, development and planning. More than 6500 residents live in Primelife facilities.

The company provides "Independent Living Units" and "Independent Living Apartments" to seniors which provides an independent lifestyle to residents while affording a secure location, companionship through the retirement village community and social activities and 24 hour emergency assistance. It also provides "Assisted Living Serviced Apartments" which provide cleaning, cooking and laundry services.

Primelife generates profit from the construction of aged care facilities and sale of the development as a profit. It also generates Deferred Management Fee income which capitalise the management fees owed by residents and enable them to be deducted from the cost of the sale of the unit (usually upon death). It also receives management fees on a non-deferred basis in the form of management fees when the retirement villages are owned by investors. And it generally receives a 2.5% resale or re-license fee when units are sold.

It was founded by entrepreneur Ted Sent and listed by mechanism of a reverse takeover on the ASX in 1998. Sent had previously established the Mainpoint group of companies and sold various assets and management rights to Primelife as part of the reverse takeover which saw Sent became the major shareholder and managing director.

From 1997 to 2003, Primelife aggressively expanded, constructing hundreds of millions of dollars of retirement village developments. Favourable tax rulings in support of investments in that sector assisted Sent in obtaining investment capital to fuel the rapid expansion which saw the former bankrupt become a multi-millionaire.

In November 2002, mining magnate Robert Champion de Crespigny and Melbourne businessman Ron Walker invested $10 million in the company, were issued five per cent of the company's stock (with an option to buy another fifteen per cent) and were appointed to the board as Chairman and Deputy Chairman respectively. It had followed some disappointing financial results and Sent had looked for another source of equity capital. The collaboration between the three prominent businessmen did not last long.

Sent was eventually forced from the board and removed as Chief Executive Officer in October 2003 after the board appointed Melbourne law firm Arnold Bloch Liebler to conduct an internal review. He declined to participate in the review and in early December Sent resinged from the board and sold the bulk of his stock representing nearly twenty per cent of the company to Babcock and Brown.

The company later raised many extraordinary allegations against Sent which he disputed including accusations that he had improperly taped staff telephone calls, that he had made payments of large sums of cash to a firm associated with Mick Gatto, that he had engaged in a large volume of inappropriate related party transactions between his company and Primelife.

Since Sent's departure, the company has appointed a new chief executive Jim Hazel and it has attempted to resolve many of the legal challenges it faced as a result of several legacy issues from previous years. The most serious of these were the legal status of 37 investment syndicates which had invested in Primelife retirement villages and facilities. The Australian Securities and Investment and Commission alleged the syndicates were not registered while they should have been, leaving investments of $123 million without sufficient protection.

In August 2004, the company reached an agreement with Australian construction company Multiplex and investment bank Babcock and Brown for a joint venture to development new retirement villages. In October 2005, the company created the PrimeLiving Trust, an investment fund for retirement villages jointly owned by Primelife, Babcock and Brown and MFS Ron Walker retired from the board in December 2005 in order to focus fully on the Commonwealth Games in Melbourne in 2006.