A Great Barrier Reef island resort, famous in the 80s and 90s for its Get Wrecked on Keppel slogan, could see a long-awaited revival through an unlikely source — cryptocurrency.
In what is being touted as a world-first, the resort’s developer Tower Holdings has confirmed it has partnered with a Sydney-based cryptocurrency consortium that plans to offer Great Keppel Island Tokens to private investors from as early as next week.
Investors can buy the tokens to help fund a $300 million development on the island, in a move similar to an initial public offering for shares.
It comes after Tower Holdings listed its multi-million dollar Great Keppel Island revitalisation project for sale earlier this year, after failing to attract private investors since gaining final approvals in 2013.
The redevelopment plans include more than 1,000 luxury villas and apartments, a 250-berth marina, a golf course and an airstrip.
An artist’s impression of the resort on Fisherman’s Beach on Great Keppel Island. (Supplied: Tower Holdings)
Standards Australia Blockchain Technical Committee member and cryptocurrency expert Philippa Ryan said it was a “brilliant” move that appeared to have the backing of Australian regulators such as ASIC and the ACCC.
“Security Token Offering is a clever new name for this particular type of fundraising model, because it clearly indicates the type of crypto token to be issued; it is a security token,” she said.
“This is much easier for ASIC to regulate than initial coin offerings, which do not issue coins at all.”
A white paper, similar to a prospectus, is expected to be released on Monday, but the company has already begun marketing on social media sites and blogs.
Dr Ryan expected the company to target two specific types of investors, with an expected minimum buy-in of $100,000.
Great Keppel Island is a 40-minute ferry ride from Yeppoon on the Capricorn Coast. (ABC Capricornia: Megan Hendry)
“I think it’s the more sophisticated investors who probably have done their research into crypto and are ready to put it into something of bricks and mortar, but I would say the more likely will be the managed investment schemes,” she said.
“There will be smaller consortia of investors who might get 10 $10,000 investors and do it together.”
However, Dr Ryan said the tokens would still be tradeable on existing cryptocurrency exchanges, which meant value could still fluctuate, with each “GKI” to initially be worth $1.
“Once it’s off and running, the person with the $10,000 investment can sell 5,000 of them for a bit of a profit while the price is going up,” she said.
“It’s like using gold knowing the price can fluctuate, but it can also act as a currency.”
Finance for project from around the world
Tower Holdings chief executive Anthony Aiossa said the cryptocurrency consortium behind the plan had been one of the first groups to show interest in the GKI project when it went up for sale earlier this year.
“Since that time, we’ve been trying a myriad of options to secure project funding to get the project off the ground,” he said.
“The crypto solution that was put to us essentially involves the raising of private equity to fund the project, using the technology of blockchain to raise finance from around the world.
“People from around the world will be able to go online, view the offering, and if they wish to participate, will be able to buy tokens and essentially own part of the project.”
The old resort on Great Keppel Island was demolished in August after 10 years of sitting dormant. (ABC Capricornia: Megan Hendry)
Mr Aiossa said this new form of project finance allowed developers to bypass normal lending practices of banks and stock exchanges, and raise finance directly from people willing to invest in the project.
“It doesn’t require debt. It’s all private equity, so it hopefully allows the project to deliver on what has already been approved and do the project justice.”
Mr Aiossa said Tower Holdings had done extensive research around the idea before considering it as a viable option.
“We spent many months trying to understand the technology of blockchain itself, and then we tried to research and talk to as many people as possible about its application into the finance world,” he said.
“It’s not something that’s just been pulled out of thin air. It’s a serious new frontier.”
Mr Aiossa said Tower Holdings had not given up on a traditional sale of the resort either.
“We continue to remain open to all sorts of opportunities to get the project moving … there’s a number of groups that are still interested in the project.”