THE private business empire of rags to riches tycoon Tom Hedley has been placed in receivership with debts of more than $150 million.

Yesterday morning, the ANZ Bank appointed receivers to the Hedley Private Group with debts between $150 million to $200 million.

Pictures: The Tom Hedley story

The news sent shockwaves through Cairns as rumours became fact by late morning.

One of the three receivers, Robert Hutson, said Mr Hedley was "devastated".

"Tom has been devastated, both personally and financially by this, but his first thoughts were for the employees and creditors of the group and those people who have supported him personally and in business since he started his plumbing business over 40 years ago," he said.

The bank has appointed Brisbane-based receivers KordaMentha with three senior personnel: Mr Hutson, John Park and Bill Buckby.

Mr Hutson said it was "business as usual" at Hedley’s as they started a full assessment of the nine construction, property, development, investment and liquor businesses which employ hundreds of people.

They are: Tom Hedley Pty Ltd, TW Hedley (Investments) Pty Ltd, Hedley Developments Pty Ltd, Hedleys Pty Ltd, Hedley Constructions Pty Ltd, Hedz Pty Ltd, Arumpin Pty Ltd TWH (QLD) Pty Ltd and Hedley Commercial Property Services Pty Ltd.

Not involved is Mr Hedley’s first business, plumbers HPS Pty Ltd, nor stock exchange-listed Hedley Leisure and Gaming Property Fund.

In a separate move, Peter Morris and Todd Kelly of Foremans Business Advisors were appointed by Mr Hedley to look at the restructuring of the hotel arm, Hedz Pty Ltd, with the purpose of a deed of company arrangement to allow the business to return to trading profitability.

Mr Hutson said the Hedley private companies would continue to trade.

"At this stage there will be no redundancies or terminations at each business but I can’t say that won’t change," he said.

Mr Hutson was unable to say how many people were employed by the group but it is understood to be in the hundreds.

He said Mr Hedley’s 11 private hotels, including his first, the Red Beret Hotel at Redlynch, would continue to trade, as would the construction arm to complete projects such as Vision on the Cairns Esplanade with the support of the Building Services Authority.

Mr Hutson refused to say what was the level of debt but said it was "substantial".

The Cairns Post has been told it is between $150 million to $200 million. Mr Hutson said the receivers would assess which assets, businesses and properties would have to be sold.

Mr Hutson said the receivers did not know how many properties were owned by the group.

The current sales staff would continue to market some of Hedley’s high profile developments, such as Vision in the city, Vue and Trinity Cove at Trinity Beach, Citi-Edge at North Cairns and land holdings throughout the region, he said.

Mr Hutson said Mr Hedley had been hit hard by the fall in sharemarkets.

This caused massive margin calls on the group’s holdings in Hedley Leisure and Gaming combined with the declining asset values, tightening credit and a marked slowdown in construction activity in Cairns and Townsville.

"Despite the best efforts of Tom Hedley and his management team to restructure operations, the downturn in construction in Cairns and Townsville and lack of new development projects, meant that the group was no longer viable," he said.

Mr Hutson said the receivers intended to complete construction of Vision, Trinity Cove and Westend (Townsville) projects as soon as possible with the approval of the BSA.

He said that Mr Hedley would continue to work with the receivers to maximise the outcome for all creditors, given his extensive experience in property construction and development as well as his working knowledge of the group’s hotel operations.

HPS Pty Ltd, which operates the plumbing business founded by Mr Hedley, is run separately and is not in receivership.

It continues to operate under the control of its existing management.

Last week Mr Hedley resigned as a director of Hedley Leisure and Gaming Property Partners Ltd.

The resignation as a director was seen as a further move by the listed hotel and gaming trust to chart a course independent of its major shareholder and founder.

While he remains the majority shareholder of HLG with about 58 per cent of its scrip, Mr Hedley has increasingly been a figurehead since resigning as chief executive officer at the beginning of the year.

He resigned to focus solely on his private business operations.

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