CVC exits Liverpool project, recovers ~$46 million in capital
CVC Limited (ASX:CVC) has agreed to let its option over the Moorebank “Liverpool” property lapse, avoiding a settlement obligation of approximately $124 million on the balance purchase price. The decision, disclosed on 17 August 2026, unlocks substantial cash inflows totalling around $46 million over the next six months.
The Board determined that not proceeding was the best outcome for LAC and for CVC shareholders, opting for capital preservation over a large, higher-risk acquisition.
CVC holds a 66.7% interest in LAC JV Pty Ltd as trustee for LAC Unit Trust (LAC), in joint venture with Leamac Property Group. LAC held the option to purchase the Property at 1 Heathcote Road, Moorebank, New South Wales, which was originally due to settle in March 2027.
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What CVC agreed with the vendor
CVC and LAC have entered into an Option Lapsing Deed with the Vendor, Prysmian Australia Pty Ltd. Under the deed, the parties agreed that neither the call option (held by LAC) nor the put option (held by the Vendor) will be exercised, and the original Option Deed will lapse on and from 1 September 2026.
The exit was structured with a defined schedule of refunds and payments back to LAC:
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The Vendor will pay a break fee on or before 30 September 2026, in consideration for LAC agreeing not to exercise the call option.
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The Vendor will refund the guarantor release payments paid by LAC on or before 30 October 2026.
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The Vendor will refund all deposit payments paid by LAC on or before 29 January 2027.
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These payments total approximately $46 million.
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LAC will continue to hold a mortgage over the Property until the refund of the deposit payments, due in January 2027.
The rationale: why walking away protects shareholder value
The strategic shift traces back to CVC’s announcement on 18 May 2026, which confirmed that the Planning Proposal for the Property, intended to permit mixed-use and predominantly residential development, had ceased. As a result, the Property remains zoned E4 General Industrial.
The strategic shift traces back to CVC’s announcement on 18 May 2026, which confirmed that the Planning Proposal for the Property, intended to permit mixed-use and predominantly residential development, had ceased. At the time the rezoning bid fell through, the Board had noted the site’s carrying value remained materially below its industrial market value, a position that ultimately made the $124 million settlement harder to justify.
Without the residential rezoning, the site’s development economics as an industrial asset carried higher downside risk. The Board pointed to constraints on future industrial development, the size and complexity of the site, and the significant cash outflow required to settle. It concluded there was no guarantee on future outcomes, making the option lapse the optimal strategy.
| Factor | Detail | Investor Impact |
|---|---|---|
| Avoided settlement | ~$124 million balance purchase price | Removes significant cash outflow |
| Cash inflows | ~$46 million over 6 months | Strengthens liquidity for corporate use |
| Write-down | ~$13 million against project (FY ended 30 June 2026) | Write-down already recognised |
| Zoning | Remains E4 General Industrial | Rezoning to residential no longer available |
The trade-off is not cost-free. CVC recognised a write-down of approximately $13 million against the project in the Financial Year Ended 30 June 2026. However, the deal removes the far larger settlement obligation, leaving the net capital position materially improved.
The Board’s position
CVC and LAC determined that the “best outcome for LAC and for CVC shareholders” was for the parties to agree not to exercise the put option or call option under the Option Deed.
Understanding put and call option deeds
In CVC’s case, this matters because the company did more than simply walk away. It negotiated an exit and secured refunds of its prior payments, a more favourable position than a forced settlement of approximately $124 million.
What the ~$46 million means for CVC
The proceeds will be utilised by the business for general corporate purposes. The inflows are scheduled to arrive across the next six months, with the final deposit refund due on 29 January 2027.
The proceeds will be utilised by the business for general corporate purposes, adding to a balance sheet already bolstered earlier in the year by the Laverton property sale, which delivered approximately $23.7 million in post-tax profit to CVC via its 70%-owned joint venture.
For investors, the outcome converts a capital-intensive, higher-risk development commitment into a near-term liquidity boost. By avoiding the settlement and recovering around $46 million, CVC has freed up capital and retained flexibility for redeployment.
No specific future investments or uses of the proceeds have been disclosed at this stage. What is clear is that the Board has prioritised capital preservation and balance sheet strength, absorbing a write-down in FY26 in exchange for removing a materially larger downside exposure.
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