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allco bankers closer to rescue

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    Allco bankers closer to rescue
    Email Print Normal font Large font AdvertisementVanda Carson
    February 25, 2008

    ALLCO FINANCE's bankers have spent the weekend edging towards an agreement on a plan to refinance the stricken investment company and rescue it from impending administration.

    The talks were aimed at refinancing a $250 million loan due to expire in just over two months and ending a nearly fortnight-long saga.

    But before the loan can be refinanced the banks which have advanced funds to Allco must be satisfied that the company's assets outweigh its liabilities.

    Late last night the Allco spokesman Ian Brown was still uncertain about whether Allco's interim results would be announced today.

    The company has until Friday to publish its accounts for the half year to December 31.

    Mr Brown said it was "more likely than not" that the company's beleaguered directors would sign the group's latest half year accounts by today.

    Their signature will allow publication of the figures which have been delayed twice in the past 10 days , despite market announcements which indicated that they had been signed and would be released.

    The director's endorsement will also trigger a sale of assets which will allow the company to pay off some of its debt.

    Its aircraft leasing business, which leases planes to international airlines, was considered an asset that would be of interest to Qantas. However the airline's chief executive, Geoff Dixon, yesterday denied he was running the ruler over the 47-strong fleet.

    "There's no interest from us," Mr Dixon told the ABC's Inside Business program.

    "We don't believe that is possible or advisable at the current time given the fact that these infrastructure funds are pretty much under some pressure".

    A syndicate of at least 10 banks, led by the Commonwealth, has hired corporate restructuring specialists Ferrier Hodgson to review Allco's books and assure them the company can continue to trade. Its shares have been in a trading suspension since February 11.

    Allco owns mostly offshore transport, property and energy infrastructure assets through a complex series of corporate vehicles - a structure which makes negotiations over its debt more difficult. In all, the Allco empire is understood to owe at least $6 billion.

    Its woes come after a year of dramatic expansion for the company when it doubled its funds under management to nearly $10 billion. In 2006-07 its profit rose by more than 50 per cent to $211 million.

    But since then, exposure to bad US loans and concerns about its solvency have forced it to withdraw from a $1.6 billion deal to buy 29 power stations in the US.
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