AFG 0.78% $2.56 australian finance group ltd

from today smh

  1. 26 Posts.
    DIRECTORS of the debt-stricken Allco Finance Group have yet to sign its latest half-year accounts amid serious concerns that the company is facing increasing difficulties meeting its liabilities.

    Following inquiries from the Herald yesterday, Allco confirmed that its board had still not settled its interim accounts almost a week after it had planned to release the figures.

    The Herald put to Allco and four directors questions about the status of the accounts and whether this reflected concerns at board level about the group's ability to service its debts as a going concern.

    In response, Allco's chief executive David Clarke replied: "I advise that Allco is in the process of finalising its accounts. It is not required by the ASX Listing Rules to sign and lodge the accounts until the end of the month."

    Yesterday's statement helped explain successive last-minute decisions by Allco to postpone its interim announcement despite clearly informing the ASX on two occasions of the release of the figures: first for last Friday and then again on Monday.

    Failure to publish the result for the half year to December 31 has increased the pressures on the troubled investment group, whose finances are now being forensically scrutinised by the corporate restructuring specialist Ferrier Hodgson, on behalf of Allco's main bankers.

    Ferrier was sent in last month by the Commonwealth Bank, one of the group's biggest lenders, in a move to ensure Allco could still meet its many commitments. It is understood that Ferrier is due to report back as to the exact state of Allco's accounts this week.

    The banks are understood to be monitoring the situation daily as Allco engages in feverish negotiations with several potential buyers, including Macquarie Group and the private equity player Texas Pacific, about a possible carve-up of the company and a cash injection.

    The list of lenders to Allco also includes Westpac, St George, Societe Generale and JP Morgan.

    Allco's directors are consumed with trying to resolve a four-way squeeze that is becoming more difficult by the day:

    - Meeting a fast-approaching deadline to refinance at least $250 million in debt.

    - Ensuring there is enough cash to cover its continuing, and much larger, loan commitments.

    - Renegotiating or pulling out of a recently announced joint venture deal to buy $1.7 billion of US power stations, of which Allco would fund half by debt and equity.

    - Signing the company's accounts, for which they will be personally liable, that would allow the suspension on Allco's beleaguered shares to be lifted.

    One source said yesterday that onlookers did not realise how all the issues were so closely interlinked. Only after all of them were solved could trading in Allco's shares resume.

    The stock remains suspended at $3.05, having lost half of its value since December.

    The shares suffered a sharp fall last month as mounting debt problems and margin calls by lenders against key individual shareholders aggravated the stock sell-off.
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