AFG - Allco Finance Group

[reece55]

IMHO, it would be highly unlikely in the current enviroment, and scrutiny they have been under, that Allco would come out 3 days before their results and tell the market something bad. The directors would all be sued from here to breakfast time if they suddenly found a new grissly bear in the cupboard. Very unlikely.

Therefore one has to ask, why would they possibly be going into a trading halt?

3 Options:
1. Management Buyout/Takeover - The airline leasing model would be very attractive as well as the talent pool Allco has.
2. New re-financing arrangements for the 250mill debt due.
3. Some new large purchase which they will sell into a fund. They will tell the market that this is evidence that the Allco model is still alive and well, and that the current enviroment is presenting opportunities rather than dismay.

Don't count out an earnings announcement.... I think auditors are starting to get ever so nervous, what's to stop the audit firm from hammering down some heavy impairment losses. I don't know what the value of their investments in associates are, but it would be a fairly large number, the minimum the AFG's satellite funds are down is 50% - this should be taken to the P&L. Plus, the Mobius loan book should have a very large impairment loss in light of the arrears figures disclosed by the AFR et al - if they don't post a poor earnings result, it would have to be fudged IMO.

Cheers

 

[prana]

rumours of buyout on this one. Will see what happens after the halt but wouldn't be suprised, especially if an ex-exec takes a large stake in the company.

 

[prawn_86]

rumours of buyout on this one. Will see what happens after the halt but wouldn't be suprised, especially if an ex-exec takes a large stake in the company.

Can you actually confirm this Prana? If not please dont post 'rumours'.

The rumour I heard was that they are in a halt so they can finalise transferring half of the company over to my name

 

[prana]

lol yeah I can understand your point. I'll back it up promptly. Apologies for the inconvenience, I wasnt attempting to ramp...

Here it is...

 

[chilliaa]

Lateline business on abc mentioned 'this rumor' i dont know if that makes it an official rumor then

 

[prawn_86]

lol yeah I can understand your point. I'll back it up promptly. Apologies for the inconvenience, I wasnt attempting to ramp...

Here it is...

Lateline business on abc mentioned 'this rumor' i dont know if that makes it an official rumor then

Reports in the media are fine to post as 'rumours'. It is when the rumours come from sources such as an unkown 'insider' or other forums that us mods get suspicious.

Will be interesting to see what happens with these guys. At a cursory glance i always thought they were an ok company, guess it shows you need to do in depth research

 

[chilliaa]

Market senses Allco management buyoutBy Katherine Jimenez
February 12, 2008 12:00am
Article from: Font size: + -
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STRONG market speculation has indicated that Allco Finance Group founder David Coe may be about to announce a management buyout, possibly including Macquarie Bank, as soon as today.

Informed talk centred on Allco (AFG) possibly announcing today a reprivatisation, led by Mr Coe and a strategic investor.

"Privatisation, that is the story going around," said one investor yesterday. He said any deal would need to be worth at least $1.5 billion.

Yesterday morning the badly battered financial services company went into a trading halt, sparking a frenzy of theories, the strongest of which was that Macquarie Bank was about to take a key stake in AFG or may acquire the entire business.

AFG has been hit in recent weeks by the cascading effect of a sagging stock price on a group of executives, including Mr Coe, who were hit by a margin call on their highly leveraged share position in their own company.

One fund manager said: "The main rumour seems to be a privatisation, an MBO (management buyout), perhaps backed by Macquarie."

A Macquarie spokesman said the group would not comment on the speculation. Allco also declined to comment.

The reprivatisation news comes amid market speculation last week that an investor might be about to take a stake in AFG and may provide some capital.

Last month, AFG co-founder John Kinghorn emerged on the company's share register with a 6.8 per cent substantial interest.

Mr Kinghorn is the founder of RHG Ltd, formerly known as RAMS Home Loans.

Documents filed with the Australian Securities and Investments Commission show Mr Coe is also a director of RHG Ltd.

One source downplayed the reprivatisation rumours saying that the prospect of debt being attracted to the Allco business model right now was "very low".

He believes a more logical outcome could be someone about to take a key stake.

Meanwhile, separate speculation has surfaced that last Thursday all of the leasing division was called in by its bankers -- believed to be the Commonwealth Bank and Societe Generale -- and read the riot act.

The timing of a potential reprivatisation comes as AFG's shares struggle to rebound and recapture market confidence after a patch of bad news from the company. There is also investor unease about how management is running the company -- specifically they feel it has been handled like a private company.

Coe's critics say too many of his deals smack of related party deals, such as a move to buy into the Rubicon real estate business set up by his friend Gordon Fell.

Since December 12, AFG's shares have fallen from $7.82 to $2.21 on January 23 before recovering yesterday to $3.05, when trade was suspended.

The complex and aggressively financed transactions that were a feature of the house that David Coe built may have delivered substantial upside during a long bull market, but they are now proving to be negatives for the group in a bear market at a time when credit for leveraged borrowers is harder to come by.

While market sentiment turned on AFG after its failed joint $11 billion bid for Qantas Airways, the bulk of the company's share price purge has been in past months, mostly in investor unease at its ability to refinance debt and highly geared borrowing structures.

That confidence took a further battering recently over the margin call brought on the executives' ownership vehicles, Allco Principal Investments, triggering panic selling in AFG.

API is a trust comprising Mr Coe and other former and existing executives in AFG.

Its horror stretch continued last week when AFG announced the postponement of the first close of its Allco Global Trust and Infrastructure Fund after a foundation investor pulled out of a $200 million commitment.

Additional reporting by Glenda Korporaal

 

[YELNATS]

AFG has today requested suspension of trading of its' shares as the date for trading halt has expired.

No indication of how long the suspension will last. Fingers crossed.

 

[Pager]

They have delayed the release again !!!!.

This article is a bit worrying.

http://business.smh.com.au/beleaguered-allco-delays-release-of-halfyear-results/20080215-1sfc.html

Particularly this bit

Allco gave no reason to the ASX for the decision. The move heightened concerns about the fund and asset management group's debt position, given the sharply rising cost of credit on world finance markets.

Its problems had prompted the group's lenders to ask the corporate restructuring specialist Ferrier Hodgson to examine Allco's books to help ensure it is able to refinance a $250 million loan facility in May, sources confirmed yesterday.

 

[Awesomandy]

From September 2007:

Assuming the div forecast is spot on, it means we get around 5.6%, mostly franked. So, even if the sp stays at the same spot for years, it would still outperform a bank account. And, with a forward PE of around 10, and growth forecasted to be around 20%, it's a no-brainer, I think. This one is going into my core strategy.

I saw signs of trouble (well, not exactly, but that's what stop losses are for), and sold it quite a while back, but still, having said what I said 5 months ago, I wonder if I still have any respect left on ASF.

 

[reece55]

Of the investment bank style entities, this one has been hit the hardest.

I remember reviewing AFG with one a friend indicating a head and shoulders pattern on the weekly time frame that pointed to 6.90 as a target - initially even I thought that was just a ridiculous target, but what do you know, it actually payed out.

AFG is in deep trouble, with a down trend that just looks terrible. I think clearly there are some impairment issues with their receivables not contained within their financial statements, because valuation wise these guys are actually pretty cheap. Still, the interest margin they achieved as Record Investments always bemused me as it was so high (like 12% and up) - you don't achieve that without taking on some risk.

Cheers

Well, it's now about 5 months and a 60% reduction in market cap for AFG and all I can say is that if it looks to good to be true, sometimes it just is. The chart told us back then this one was a disaster....

Today confirms the suspicions that I have always had... No company delays the release of their financial statements with no good reason unless you are arguing with your auditors - perhaps we are seeing another MFS where they just won't come out of trading halt......

Cheers

 

[Pager]

Well I'm resigned to the worst with this one, been living on hope for the past month and that in itself was a mistake

Sh#t happens as they say, was a true believer in the Allco story but it ain't looking too flash know with Macquarie and/or B&B set to pick up the good bits at a knockdown price.

Unless they surprise everyone it will be a big dent in my profits for the year

 

[reece55]

Well I'm resigned to the worst with this one, been living on hope for the past month and that in itself was a mistake

Sh#t happens as they say, was a true believer in the Allco story but it ain't looking too flash know with Macquarie and/or B&B set to pick up the good bits at a knockdown price.

Unless they surprise everyone it will be a big dent in my profits for the year

Well I don't reckon your the only one Pager, I know plenty of other people that loaded up on this stock at 6 bucks only to watch it continue slide down. And hey, if it's only profits and you had diversified, then you will come out stronger at the end. Believe me, I've been through these kinds of stocks in the past when I was holding them - not a comfortable position to be in... At least you have the balls to post about it!

Cheers
Reece

 

[kash]

I notice an announcement regarding substantial holdings for allco Can anyone tell me what this is telling us?

 

[reece55]

I notice an announcement regarding substantial holdings for allco Can anyone tell me what this is telling us?

Their secretarial department forgot to lodge sub notices for all of the subs inherited from the Rubicon acquisition - it's old news, doesn't really mean anything in the context of Allco's going concern/trading status.....

Cheers
Reece

 

[sam76]

2324 GMT [Dow Jones] Allco Finance (AFG.AU) tumbles more than 50% to be last at A$1.50 after returns from extended trading halt with announcement of 10% net profit fall, plans for sales of non-core operations to pay debt. No dividend forthcoming for 1H given company's financial situation. Much uncertainty remains. Hard to be optimistic about prices AFG will get for its assets in current environment, and given apparent forced sale. (RBT)


OUCH - feel for those in AFG atm

 

[sam76]

What Bloomberg has to say:

Feb. 25 (Bloomberg) -- Allco Finance Group Ltd. plunged more than 60 percent in Sydney trading after the Australian asset manager said lenders may force it to repay A$1.15 billion ($1 billion) of debt in the next three months.

Allco has A$250 million of debt due May 1 and another A$900 million that it could be called on to repay within 90 days, Chief Executive Officer David Clarke said in a statement today.

Allco shares slumped to A$1.11 at 11:10 a.m. local time, a 92 percent drop from their record A$13.23 a year ago. The Sydney- based company joins Australian firms including Centro Properties Group and MFS Ltd. that have lost most of their market value as investors shun indebted firms with complex corporate structures. Allco is a stakeholder in at least five listed funds that carry its name.

``The rapid and unanticipated dislocation in global credit markets and associated volatility in equity markets has had a significant impact on the operations, financial position and outlook for Allco,'' Clarke said. ``We are now developing and will be implementing a focused and aggressive business restructure.''

The shares had been suspended since Feb. 9 as the company twice postponed its earnings announcement.

The company, which manages A$9.4 billion, today said it will continue to focus on managing its existing real estate, aviation, shipping and rail assets, while it's in talks to sell ``non core assets.'' It didn't name the parties that it's talking to or the assets that it intends to sell.

Selling Assets

Allco said it had already agreed to sell its stake in the Consolidated Edison portfolio of power stations at a loss of A$72.1 million to Industry Funds Management.

The company also said net income fell 14 percent to A$84.7 million in the six months ended Dec. 31, from A$98 million a year earlier. It did not pay a first-half dividend, and said it did not expect to pay a dividend in the next half.

Last month, Allco sparked rumors of a takeover by Macquarie Group Ltd. when two lenders forced the sale of 22.1 million shares, about 6 percent of Allco's issued capital.

Allco Principals Investments Pty, an investment vehicle controlled by past and present company executives that used its stake in Allco Finance as collateral for loans, had agreed with two lenders to halt margin calls until after the company posts its annual earnings, scheduled for Aug. 21.

Macquarie Group, Australia's biggest investment bank, and Allco were partners in a failed attempt to take over Qantas Airways Ltd. last year.

Qantas, Australia's biggest airline, yesterday said it would not bid for any of Allco's 54 aircraft.

 

[Pager]

Dumped all mine today

Got out of MFS and Centro before the carnage, 3rd time not so lucky

What a disappointment this stock has been, all I can think of to say is from Blackadder, when Edmund is thinking of a suitable phrase for being given orders for going over the top "It rhymes with Clucking Bell Balldrick"?

 

[vishalt]

This company will be wound up, might as well go short on it till it goes to 40c like Centro, still 50% more to go!

 

[Pager]

I find it ironic that the stock price plunged to about $3 only a few weeks ago when it was revealed that senior managers had received margin calls and had to sell a good portion of there holdings

Must be thanking there lucky stars today i would imagine .