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Equititrust?

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Equititrust has recently changed their website from (words to the effect of):

"In seventeen years we have never lost a cent of our investors capital, were proud to say "You've earned the equity, we've earned the trust"".

TO:

"On the back of our 17 years of experience, we're proud to say, "You've earned the equity, we've earned the trust."".

Looks like in seventeen years, Equititrust has lost a cent of their investors capital. Most likely in this dudley fiasco and we will find out soon (most likely when its too late). Thanks.
 
Re: Equititrust? ZENCORP

I hadn't noticed that - I'd suggest that ASIC may have said something and right now, I reckon that they have lost 50cents for every dollar w ehave in there..... atleast the accuracy of the reporting has improved!
 
Re: Equititrust? ZENCORP

kostag said:
I hadn't noticed that - I'd suggest that ASIC may have said something and right now, I reckon that they have lost 50cents for every dollar w e have in there..... at least the accuracy of the reporting has improved!
Click to expand...

2010 Financials, page 25, "... Loans which have been renegotiated whose carrying amount would otherwise be impaired or past due as at reporting date were as follows:
(2010) 31 loans $183,023,971 72% - (2009) 26 loans $73,235,423 24% ..."
These loans are not considered at risk and have been re-negotiated on terms that enable timely payment and adequate yield. ..."

Isn't it an extraordinary statement "... whose carrying value would otherwise be impaired or past due as at reporting date ..." .. SEVENTY-TWO PERCENT OF THE FUND!

I wonder what terms could the manager "renegotiate" with a lender when the loan prior to the "renegotiation" would be impaired or past due? Such loans jumped from 24% to 72%.

But all is well, on 30 June 2010, the manager considered the loans not ar risk, and the loans have, by the "renegotiating" power of the manager, mutated from loans either impaired or past due, to ones complying with "timely payment and adequate yield".

Great .. all is well .. for 74% of the fund. phew!

and the good news is, the manager seems to have exhibited this power for a number of years .. in (2008), 27 loans $69,049,941 17%.

2008: 27 loans $69,049,941 - 17% of the fund
2009: 26 loans $73,235,423 - 24% of the fund
2010: 31 loans $183,023,971 - 72% of the fund

Notice anything about the figures? Seems at least 25% of the fund has been continually "renegotiated" for three years - but the explosion in 2010 must seem like a big surprise!

I would have thought that to be extraordinary - but I guess it mustn't be, the auditors (KPMG) don't seem to think so.

I wonder if investors consider these 'renegotiated' loans as much as a safe bet as has the manager over these past years?

This is where that term 'capitalized interest' comes in (the non-cash item).

"... over the past three months, however, we have, with few exceptions, stopped the capitalisation of interest so as to allow the loan to go into default and thus enable Equititrust to take enforcement action for the control of it. ..."

One wonders why they didn't take that same action three years ago?
 
Cashflow - Investor Returns

In terms of cash flow, capitalised interest on the majority of loans and the cancelled
50M Capital raising, will Equititrust be able to pay investors returns for much longer..


The interim Financial Results were promised by the company prior to the required lodgement date of 16 March. Let’s see if that promise is kept..

The accompanying auditor's report will be of interest to all investors and stakeholders..
 
Re: Equititrust? LOANS UNDER RE-NEGOTIATION

Was QUINLIVIN LOANS under re-negotiation? PRESS articles quoting EQUITITRUST last week all stated that EQUITITRUST had bene involved in this asset etc for over a year - so why wasn't the $70Million impaired exposure raised at that time.

Why didn't the auditors raise it then???

ASICK said:
2010 Financials, page 25, "... Loans which have been renegotiated whose carrying amount would otherwise be impaired or past due as at reporting date were as follows:
(2010) 31 loans $183,023,971 72% - (2009) 26 loans $73,235,423 24% ..."
These loans are not considered at risk and have been re-negotiated on terms that enable timely payment and adequate yield. ..."

Isn't it an extraordinary statement "... whose carrying value would otherwise be impaired or past due as at reporting date ..." .. SEVENTY-TWO PERCENT OF THE FUND!

I wonder what terms could the manager "renegotiate" with a lender when the loan prior to the "renegotiation" would be impaired or past due? Such loans jumped from 24% to 72%.

But all is well, on 30 June 2010, the manager considered the loans not ar risk, and the loans have, by the "renegotiating" power of the manager, mutated from loans either impaired or past due, to ones complying with "timely payment and adequate yield".

Great .. all is well .. for 74% of the fund. phew!

and the good news is, the manager seems to have exhibited this power for a number of years .. in (2008), 27 loans $69,049,941 17%.

2008: 27 loans $69,049,941 - 17% of the fund
2009: 26 loans $73,235,423 - 24% of the fund
2010: 31 loans $183,023,971 - 72% of the fund

Notice anything about the figures? Seems at least 25% of the fund has been continually "renegotiated" for three years - but the explosion in 2010 must seem like a big surprise!

I would have thought that to be extraordinary - but I guess it mustn't be, the auditors (KPMG) don't seem to think so.

I wonder if investors consider these 'renegotiated' loans as much as a safe bet as has the manager over these past years?

This is where that term 'capitalized interest' comes in (the non-cash item).

"... over the past three months, however, we have, with few exceptions, stopped the capitalisation of interest so as to allow the loan to go into default and thus enable Equititrust to take enforcement action for the control of it. ..."

One wonders why they didn't take that same action three years ago?
Click to expand...
 
Re: Equititrust? ZENCORP

Basically - in order to support the bank debt facility, Equititrust must have a certain proportion of eligible assets in order for the facilities to be rolled. Keeping this in mind, Equititrust was most likely required to sugar coat the majority of its loans and not put them in default. Once a loan goes into arrears for a certain proportion of time (i think 90 days), the loan does not form part of the "eligible assets" under the banking facility and hence the NAB would have moved earlier. Equititrust has now basically freed itself from the grasp and control of bank covenants (i.e. NAB bar for 26M) and is quickly trying to realize assets to get the fund back to a liquid state. However, it looks as if a perfect storm has hit Equititrust with Westpac moving on entities associated with one of its largest borrowers (i.e. Dudley).

ASICK said:
2010 Financials, page 25, "... Loans which have been renegotiated whose carrying amount would otherwise be impaired or past due as at reporting date were as follows:
(2010) 31 loans $183,023,971 72% - (2009) 26 loans $73,235,423 24% ..."
These loans are not considered at risk and have been re-negotiated on terms that enable timely payment and adequate yield. ..."

Isn't it an extraordinary statement "... whose carrying value would otherwise be impaired or past due as at reporting date ..." .. SEVENTY-TWO PERCENT OF THE FUND!

I wonder what terms could the manager "renegotiate" with a lender when the loan prior to the "renegotiation" would be impaired or past due? Such loans jumped from 24% to 72%.

But all is well, on 30 June 2010, the manager considered the loans not ar risk, and the loans have, by the "renegotiating" power of the manager, mutated from loans either impaired or past due, to ones complying with "timely payment and adequate yield".

Great .. all is well .. for 74% of the fund. phew!

and the good news is, the manager seems to have exhibited this power for a number of years .. in (2008), 27 loans $69,049,941 17%.

2008: 27 loans $69,049,941 - 17% of the fund
2009: 26 loans $73,235,423 - 24% of the fund
2010: 31 loans $183,023,971 - 72% of the fund

Notice anything about the figures? Seems at least 25% of the fund has been continually "renegotiated" for three years - but the explosion in 2010 must seem like a big surprise!

I would have thought that to be extraordinary - but I guess it mustn't be, the auditors (KPMG) don't seem to think so.

I wonder if investors consider these 'renegotiated' loans as much as a safe bet as has the manager over these past years?

This is where that term 'capitalized interest' comes in (the non-cash item).

"... over the past three months, however, we have, with few exceptions, stopped the capitalisation of interest so as to allow the loan to go into default and thus enable Equititrust to take enforcement action for the control of it. ..."

One wonders why they didn't take that same action three years ago?
Click to expand...
 
Re: Equititrust? ZENCORP: AN ALARMING ANALYSIS AND ONE THAT MUST WORRY KPMG

this is very good analysis work....
zencorp said:
Basically - in order to support the bank debt facility, Equititrust must have a certain proportion of eligible assets in order for the facilities to be rolled. Keeping this in mind, Equititrust was most likely required to sugar coat the majority of its loans and not put them in default. Once a loan goes into arrears for a certain proportion of time (i think 90 days), the loan does not form part of the "eligible assets" under the banking facility and hence the NAB would have moved earlier. Equititrust has now basically freed itself from the grasp and control of bank covenants (i.e. NAB bar for 26M) and is quickly trying to realize assets to get the fund back to a liquid state. However, it looks as if a perfect storm has hit Equititrust with Westpac moving on entities associated with one of its largest borrowers (i.e. Dudley).
Click to expand...
 
http://www.equititrust.com.au/Pdfs/Priority_Class_Income_Fund_SHORT.pdf

Hey, the 'Priority Class Income Fund" PDS is a good read.

"... The purpose of the loan is to refinance an existing credit line facility provided by the National Australia Bank (NAB) and for future lending with board approval, payment of distributions and redemptions to EIF investors. ..." (emphasis added)

The words "payment of distributions" should have made the hairs on the backs of investors' necks stand up ...

Couple the continued capitalization of interest with up to $25m @ 9.00% to 9.35% payments to the new investors, and the newly divulged loan difficulties, then it seems (at least to me) that the members have been more than lucky with ASIC's decision to disallow the capital raising. The capitization of interest could have gone on for years to come.

This is what has happened in at least one other fund (Citypac) whereby a facility provider provided extra money ($90m) in circumstances such as are now being suffered in the EIF (capitalized interest / loan defaults) - in fact, Citypac, at times, were a little more creative - It seems some capitalized loans were paid out by further capitalized loans to other related entities.

I think fund managers should be forced to separately itemize capitalized interest and cash receipts of interest. In City Pacific's fund, such amounts were disclosed as one total for each loan, "Interest Paid/Payable" - who could tell what was what?

At least EIF disclosed what was being done, except of course, the little thing about running around the periphery and plugging $30m of fund loan impairments.

Investors didn't know about the $30m, but I wonder whether the NAB did?

I wonder if investors were initially hopeful that the $50m fundraising would have worked? I wonder if those who were hopeful are now disappointed that the capital raising was put to rest?
 
Re: Equititrust? ZENCORP: AN ALARMING ANALYSIS AND ONE THAT MUST WORRY KPMG

kostag said:
this is very good analysis work....
Click to expand...

Yes, Zencorp did a good job. A braver man than I, is he.
You're doing well too Kostag.
 
An amendment to posting #364:

"... Couple the continued capitalization of interest with up to $50m @ 9.00% to 9.35% payments to the new investors, and the newly divulged loan difficulties, then it seems (at least to me) that the members have been more than lucky with ASIC's decision to disallow the capital raising. The capitization of interest could have gone on for years to come. ..."
 
Re: Equititrust: dont worry: what's $25M when you are not counting

who's checking
ASICK said:
An amendment to posting #364:

"... Couple the continued capitalization of interest with up to $50m @ 9.00% to 9.35% payments to the new investors, and the newly divulged loan difficulties, then it seems (at least to me) that the members have been more than lucky with ASIC's decision to disallow the capital raising. The capitization of interest could have gone on for years to come. ..."
Click to expand...
 
I do not wish to see hearsay posted in this thread (or anywhere else on the forums). All discussion should be based around verifiable publicly available information or articles/reports published by the mainstream media.

Posting unsubstantiated speculation only serves to muddy the issue and any posts containing this kind of questionable second or third hand information from unnamed sources will be removed from the thread.
 
Promised Interim Financials

The interim financials, promised to be issued by Equititrust earlier than the ASIC due date of 16 March would be welcome by all investors and stakeholders. To date nothing..

The longer the delay the greater the perception issues the company faces.


The interim financials will also be a barometer of the merits of the failed 50M capital raising . The state of the finances, coupled with the Auditor’s report, will clarify whether ASIC had any other concerns in regard to the capital raising and whether this would affect incoming investors.

A statement as to alternate funding arrangements to replace NAB and Bank of Scotland would also be welcome.

General statements by Equititrust that the fund will become liquid, in light of recent media revelations, is mere puffery..
 
Gold Coast Bulletin today - Equititrust has a 10m exposure to a company linked to the Nikiforides Family. This company is in receivership with the principal financier being owed some 50m.

Another failed investment the newspapers bring to our intention.
 
New Loans in Default

Is there a web link to this story in the Gold coast Bulletin..
 
Re: New Loans in Default

Not yet - I have looked for the web version. I have a hard copy so if its not up on the web by tomorrow I will scan it and attach the file.

No Trust said:
Is there a web link to this story in the Gold coast Bulletin..
Click to expand...
 
Re: EQUITITRUST: New Loans in Default: any confirmation of large loan to NIKIFORIDES

did you find the PRESS article
zencorp said:
Not yet - I have looked for the web version. I have a hard copy so if its not up on the web by tomorrow I will scan it and attach the file.
Click to expand...
 
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