NextDC chief Craig Scroggie blasts Bankwest enforcement action in APDC takeover

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NextDC chief Craig Scroggie blasts Bankwest enforcement action in APDC takeover

NextDC chief executive Craig Scroggie has publicly criticised Bankwest’s decision to launch an “aggressive” enforcement action in relation to the data centre operator’s takeover of Asia Pacific Data Centre.

Writing on LinkedIn, Scroggie referenced a Sydney Morning Herald report on the bank’s issuance of a default notice with a 14-day payback period, casting doubts over APDC’s ability to pay a special distribution of $0.02 per security promised to shareholders on 14 November.

“At NextDC, we have certainly seen our fair share of appalling bank behaviour over the years as we have built the company from a startup to over $2 billion, but our most recent experience with Bankwest is worthy of note,” Scroggie said.

“No bank launches an aggressive and overhanded enforcement default for a technical change of control condition in an agreed public markets context unless the credit is already delinquent.”

He added that APDC owed Bankwest a “mere” $29 million with asset backing of $261 million, plus the backing of NextDC as a "superior credit party", but the bank still issued the data centre provider a legal letter concerning its capacity as APDC’s tenant.

“[NextDC] asked Commonwealth Bank to investigate the circumstances leading to such outrageous action by Bankwest. CBA management’s initial response to handle a serious compliant beggars’ belief – they pass responsibility back to the very people at Bankwest who have perpetrated the action to investigate themselves!” Scroggie said.

“The initial response we get from the CEO of Bankwest is words to the effect of ‘oh it’s not our fault we are just protecting ourselves’. Are you serious?”

Scroggie added that this “road bump” was of little concern financially, but was more concerned about Bankwest’s behaviour and that the bank needed to be called out publicly.

“This just goes to highlight yet another example of bank bullying and bad banking conduct in an already broken system,” Scroggie said.

“Let’s hope for the good of the country, when the final report is delivered by the Royal Commission into Misconduct in the Banking Industry some genuine wholesale changes are made to the Australian banking landscape, starting with culture.”

A Bankwest spokesperson said that matter was confidential and that "discussions between the parties involved are continuing". 

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