Here's a riddle for ya, Georgie boy.

  1. 3,816 Posts.
    Here's a riddle for ya, Georgie boy.

    CXL made the following announcement:

    CENTRAL EXCHANGE LIMITED 2002-07-30 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    ASX MARKET RELEASE

    Participating Organisations are advised that subject to shareholder
    approval the reorganisation of capital for Central Exchange Limited
    (the "Company:") will be effective from Wednesday 31 July 2002.

    The reorganisation is by way of consolidating every 10 fully paid
    ordinary shares in the capital of the Company into one fully paid
    ordinary share. Fractions will be rounded up.

    The Company's securities were suspended from official quotation at
    the close of trading on Monday 29 July 2002 pending the outcome of
    the shareholders meeting and compliance with listing rule 11.1.3 and
    chapters 1 and 2.

    The following timetable will apply.

    30 July 2002 Shareholder approval.

    31 July 2002 Trading would normally commence in the reorganised
    securities on a deferred basis
    ASX Code: CXLDA

    7 August 2002 Last day for the Company to register transfers on a
    pre-reorganisation basis.

    8 August 2002 First day for the Company to register securities on a
    post reorganisation basis.

    14 August 2002 Despatch date. Deferred settlement trading would
    normally end.
    ASX Code: CXL

    15 August 2002 Normal T+3 trading would normally commence.

    20 August 2002 Settlement of trades conducted on a T+3 basis.

    The securities of the Company remain suspended.

    ASX Contact: Jill Hewitt
    Business Unit: Companies Perth
    Ext.No: 6023
    As you are probably aware, CXL had a payment due from ANL on 22/09/02, equivalent to about $3 per share on a post consolidation basis. I am rather intrigued as to why CXL has not as yet relisted. However, it is of no great concern when you consider this announcement by Queste Communications Ltd:

    QUESTE COMMUNICATIONS LIMITED 2002-08-13 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    Queste Communications Ltd ("Queste" or the "Company") believes it is
    appropriate to provide an update to the market on the status of its
    operations and its financial position. It accordingly now makes this
    announcement outlining the following matters:

    TECHNICAL SERVICE FEES FROM CENTRAL EXCHANGE LTD ("CENTRAL EXCHANGE")

    At the General Meeting of the Company held on 8 August 2002,
    shareholders approved the termination of the Technical Services
    Agreement between Central Exchange and Queste and the full and final
    settlement of all past and future fees payable by Central Exchange to
    Queste under such agreement.

    This settlement will result in the payment by Central Exchange to the
    Company of:

    (1) $150,000 in cash; and
    (2) $300,000 to be satisfied by the issue of 1,934,236 shares in CXL.

    Central Exchange recently consolidated its share capital on a 1:10
    basis such that every 10 fully paid ordinary shares held by
    shareholders in Central Exchange would be converted into one fully
    paid ordinary share.

    After settlement of this transaction, Queste will emerge with a total
    of 4,149,112 shares in Central Exchange on a post-consolidated basis
    (comprising 48.82% of its issued share capital).

    INTERNATIONAL VOIP TELECOMMUNICATIONS NETWORK

    Shareholders will recall from earlier Company announcements the
    decision of the Company to defer the roll out of an international
    VoIP telecommunications network based upon its VoiceNet System VoIP
    technology.

    This decision was made in light of a number of factors including the
    significant downturn in the international telecommunications sector,
    the expected expenditure required to roll-out and maintain an
    international telecommunications network, the current cash reserves
    of the Company, the fact that the majority of the costs of the
    Company in setting up such network would be dominated in US$, the
    current economic and financial climate making it difficult to raise
    capital, particularly in the telecommunications industry, and the
    current lack of interest and support generally in the worldwide
    telecommunications industry by investors.

    In light of the facts highlighted above, the Company has no plans to
    recommence the deployment of such a network.

    COMMERCIAL OPPORTUNITIES FOR VOICENET SYSTEM VOIP TECHNOLOGY

    The Company has been actively pursuing opportunities to either
    license or sell outright its VoiceNet System VoIP technology both in
    Australia and overseas.

    The Company has directly approached a number of potential purchasers
    and or licensees and has engaged an Australian based agent
    experienced in the marketing and sale of technology assets worldwide
    to explore all possible commercial opportunities for the VoiceNet
    System VoIP technology.

    To this end detailed marketing and promotional materials were
    prepared and studies conducted of potential purchasers and or
    licencees of the VoiceNet System VoIP technology worldwide.

    This process resulted in the identification of several hundred
    organisations throughout the USA, Asia and Europe that might present
    sale and or licencing prospects.

    Pursuant to this process, all of these organisations were contacted
    and provided with details of the VoiceNet System VoIP technology.

    Queste and its agent have been actively pursuing all organisations
    that expressed an interest in the technology assets of the Company
    and this process is ongoing.

    Currently the Company has a number of active prospects for the sale
    and or licensing of the VoiceNet System VoIP technology in
    particular several organisations in the USA and one in China. The
    Company is pursuing such prospects, however, there has, to date, been
    a disappointing response overall to the Company's marketing
    activities as no offers for such technology have been received.

    The Company believes that the following factors are relevant to the
    disappointing results so far:

    * The telecommunications industry has suffered a significant downturn
    worldwide resulting in even large companies facing financial
    difficulty. In the USA, bankruptcy, lay-offs, restructuring and
    mergers and acquisitions are now commonplace and it is difficult in
    such environment to capture people's attention about a
    telecommunications opportunity utilising a new technology platform
    such as that of the Company's VoiceNet System.

    * There are a number of competing VoIP technologies now available
    worldwide and due to the severe downturn in the international
    telecommunications sector a number of technology owners are also
    aggressively seeking to sell or licence their technology.

    * There has been a very large investment in traditional
    telecommunications infrastructure worldwide leading to a significant
    overcapacity in the telecommunications sector. This overcapacity has
    led to a highly competitive market for the provision of traditional
    telephony services - leading to falling long distance
    telecommunications charges, thereby eroding the competitive advantage
    that VoIP technology potentially affords.

    * The USA market is moving to new telecommunication standards beyond
    the H.323 standard upon which the VoiceNet System architecture is
    based) and which new standards are not supported by the VoiceNet
    Systems product line. In this regard the Company does not believe it
    prudent to expend further funds on the modification of its current
    platform to comply with these new standards.

    Whilst the Company still hopes to realise value for the technology,
    based upon the above facts, the Directors believe that it will be
    appropriate to shortly undertake a formal review of the value of the
    technology with a view to writing down the carrying value of the
    technology in the accounts of the Company.

    Shareholders will be advised as to the outcome of this process when
    it is complete.

    ANZOIL NL INVESTMENT

    As part of the Company's strategy to grow shareholder value through
    the acquisition of strategic investments, on 17 January 2002 the
    Company announced that it had entered into an agreement with IGM
    Group Ltd ("IGM") (an ASX listed mining company) to acquire from IGM
    18,440,158 shares and from other parties 3,059,842 shares, being a
    total of 21,500,000 shares in Anzoil NL (the "Anzoil Transaction
    Agreement").

    For reasons detailed in the Company's Market Announcement of 28 May
    2002, the Company decided not to proceed with this acquisition and as
    a consequence have also disposed of all its shares in ASX listed DSG
    Australia Ltd (formerly Suan Australia Ltd).

    FINANCIAL POSITION OF COMPANY VERSUS SHARE PRICE

    The Company notes that the current share price of the Company, which
    last traded at 2.5 cents per share on 12 August 2002, is
    significantly below its current net cash and liquid asset backing of
    approximately 14.27 cents per share determined on the following
    basis:

    NOTES
    Cash 1 $2,897,000
    Investments in Listed Companies 2 $875,000
    Building Commercial (estimated
    realisable value) $425,000

    Net Cash & Liquid Assets $4,197,000

    Adjusted Issued Share Capital 3 29,404,879

    NET CASH & LIQUID ASSET
    BACKING PER SHARE 14.27 cents

    NOTES:

    1. The cash balance includes the $150,000 receivable from Queste
    described above in relation to the termination of the Technical
    Services Agreement.

    2. The value of investments in listed companies is determined based
    on the last sale price of each company. This value includes the
    Company's investment in Central Exchange valued at 15 cents per share
    determined on a post 1:10 share consolidation basis by multiplying
    the last sale price of 1.50 cents per share on 25 July 2002
    (pre-consolidation and prior to the shares in Central Exchange being
    suspended from the ASX on 30 July 2002) by a factor of 10.

    3. This comprises the current issued capital of 28,404,879 fully paid
    ordinary shares plus a 1/20th portion of the 20,000,000 ordinary
    shares partly paid to one cent each on which there is an outstanding
    amount of 19 cents per share.

    The Company further notes that the net tangible assets of the Company
    as at 30 June 2002 (provisional unaudited) is slightly higher than
    the $4,197,000 net cash and liquid asset figure described above. The
    Company's accounts have not been audited and final audited figures
    will be released in due course.

    FUTURE DIRECTION

    Whilst the Company is disappointed at the lack of success to date in
    marketing the VoiceNet System VoIP technology, the Company will
    maintain its efforts in this regard whilst continuing to evaluate a
    range of opportunities in order to grow shareholder value.

    Further information:

    Victor Ho Ph: +61 8 9214 9777
    COMPANY SECRETARY Email: [email protected]
    Apparently this would leave Queste with a net asset backing of around 48 cps if CXL gets paid. Yet there are shares on offer for 3.6 to 5 cps and the company is rarely traded. If ANL goes down the dunny, as I suspect it will, Queste still has a nta of about 14 cps, of which about 10 cps is cash. It strikes me as weird that ANL, with a nta of about minus 100 cps, carrying an obligation of 70 cps for shareholders to maintain their stake, and the possibility of having the plug pulled at any time, enjoys such strong price support.

    The deal that the Bondholders are mulling over involves a fractional settlement for them, while ensuring that all other creditors maintain their full claims and saving the shareholders skins. No wonder none of the other creditors are moving to pull the plug on this one! But didn't your mummy tell you the terrible tale of the Gingerbread Man? I mean, isn't something about the following scenario a bit whiffy?

    Isn't it just dandy that those thoroughly decent banker chappies from Wall Street are going to take it on the chin, so that all of ANL's other creditors will get everything that is owing to them, and all of the ANL faithful can have their fairytale ending. I think that Jesus Christ Himself will bless them!
    If the deal goes ahead it will be the greatest turnaround in Australian corporate history IMHO, and an utterly fantastic opportunity for shareholders. But I am afraid I dont believe in fairytales.

    Hot Potato!! Hot Potato!!
    You've certainly got a lot of gumption Georgie boy!

    Billy
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.