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AFG, AUSTRALIAN FINANCE GROUP LTD
mercury
post Posted: Mar 4 2008, 03:38 PM
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In reply to: balance on Monday 03/03/08 11:25am

Ferrier Hodgson have been called in for 'advising' purposes (although I am not sure if they are advisig the banks or AFG.)
Liquidation is the last resort of course, but the banks have a huge amount of money wrapped in this company, and they want to see the best outcome possible. But will they lend again? Will they renew thier loans as necessary? that is the crunch. Maybe they will just find a reason to abandon AFG and in come the administrators to sell the assets and the creditors (secured) get their money back, rather than try to put the company on their feet again. This is their choice.....and they can always use the excuse that they can't get enough funds from overseas, because money is tight. They do that already....so why not again.
Now I probably don't know what I am talking about....but today's selling says that people are worried. And the banks have got to be worried too....expecially as I read in the NY Times today, that there are 200 banks (small ones) that have lent up to 115% to contractors for residential properties....and what if they can't sell? Peobably the banks will be taken over by bigger ones. But the bottom line is a nasty future for some.

Not a rosey picture.

Mercury

 
ericson
post Posted: Mar 4 2008, 03:00 PM
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In reply to: balance on Tuesday 04/03/08 11:48am

the more you read,the more it is apparent that Coe and co were either negligent , incompetent &/or dishonest. "hubris'is the usual disease contracted by these high fliers.

Read todays "aust'

 
balance
post Posted: Mar 4 2008, 11:48 AM
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In reply to: zog on Monday 03/03/08 02:13pm

You are prob right zog.I was just having a dig at them.
Keeping them on and not in total conrol is a good move.They are very good operators caught in a debt trap.Having that expertise to trade out is likely essential.A vested interest is also of some value as you say.




--------------------
Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 
zog
post Posted: Mar 3 2008, 01:13 PM
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In reply to: balance on Monday 03/03/08 10:25am

My view is that the banks have probably insisted on getting these changes to the board, however they need Coe, Turnbull and Fell around (as employees) to sought out the mess. IMO this is good news since it implies the banks are staying in there (at least for the timebeing). Coe (et al) still has plenty of incentive to sought this mess out since they still have plenty of shares (and notes).

The market could be reacting to the general trend today and also the AHUGA closed its doors on Friday night (it seems to be a practice to announce bad news on a Friday night).

 
balance
post Posted: Mar 3 2008, 11:25 AM
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I see Coe Turnbull and Fell have resigned fom the board and the SP has dropped another ~20%.
I wonder if the mkt is pricing afg @ -20% because they are stepping down from the board or because they are still there in some management capacity ?? devilsmiley.gif



--------------------
Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 
zog
post Posted: Feb 29 2008, 05:30 PM
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In reply to: zog on Friday 29/02/08 04:24pm

Sorry got the links the wrong way around. Should be as below:

Lewis purchase of AFGHA

Intelligent investor article on AFG/AFGHA



 


zog
post Posted: Feb 29 2008, 05:24 PM
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In reply to: zog on Wednesday 27/02/08 10:36pm

Interesting to see that Neil Lewis on the Allco Board (non-exec) has bought AFGHA another (he already had 5,000) 5010 AFGHA @ 30.099. The link is:

[URL=Lews purchase of AFGHA]http://www.asx.com.au/asxpdf/20080229/pdf/317ryhkw6pxh1x.pdf[/URL]

Also an article by Intelligent Investor which is pretty pessimistic. Link is:

[URL=Intelligent Investor link on AFG/AFGHA]http://www.intelligentinvestor.com.au/articles/Allco-Finance-Group-Limited-AFG/Hangover-hits-Allco.cfm?articleID=390774[/URL]

My view is that the $2.4 billion of Net assets is AFTER the loans to the banks and AFGHA have been deducted from the gross asset and even is AFG are worth 1c then AFGHA holders would get $100 face value for AFGHA. IMO is seems likely that at the current market value of $16.00, holders of AFGHA holders have a good chance of getting more than they would on the market and as such I will be sitting tight. It also gives a good feeling to know that one of the Allco directors clearly is holding his existing (5,000) notes and has bought another 5010 notes indicating to me that Neil Lewis at least thinks it is likely to be worth greater than he paid ($30.099). Lewis also bought on 26/2 - after the half year result announcement.



 
zog
post Posted: Feb 27 2008, 11:36 PM
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In reply to: zog on Wednesday 27/02/08 10:24pm

Please note that K1 has posted a link to the bank bill rates (on ASX 100 cash is king thread) and it seems the current 6 month rate is 8.0483%. As I understand it the new rate for the AFGHA should at $20 market value be 5 times (8.0483+2.1=(10.0483x5)% but as I have said with no divvy I feel that it is unlikely to be paid and will be accumulated at this rate + 2% (to face value). IMO if AFG go into administration the note is behind the banks in the pecking order but before the shareholders. Do your own research - I am often wrong.

 
zog
post Posted: Feb 27 2008, 11:24 PM
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In reply to: david_j_c on Wednesday 27/02/08 01:00pm

The current response to the ASX seems to indicate that the banks are at least talking about rolling over the loans.

You are right that IMO the interest on the note are against the face value ($100) of the notes and that my understanding is that this rate is 2.1% above the 180 day bank billing rate (paid half yearly). Consequently if the market value of the notes is say $20 then you should get 5 times the face value rate (i.e about 47% interest to the current market value of say $20). IMO AFG do not have to pay this interest if they are not paying a divvy but as I understand it they must pay the interest off on the notes before they pay a divvy and then a premium of 2% is added to the face value of the note for the time the interest is not paid. The note matures in the event of a "trigger event" such as a change of ownership (one concerns about not giving the half year results by Friday was evidently that this may be a "trigger event" - no one wanted to find out). The note matures in 2017 but a reset date is in 2012 which is also a date when repayment of the face value can be demanded (if AFG are given notification). Please refer to the prospectus on the AFG site for the details I am only giving you my (possibly incorrect) view of what happens. Please note that at the time of taking out this investment I thought this was a "safe" investment, which has proved to be very wrong. Anything in AFG must be considered a high risk - they may not make it. I am sticking in there because this is where I found myself - my risk tolerance (which is low) would not cause me to invest in AFG right now, but the returns could be high if it all work out and is IMO a lower risk than the share and the return is mainly conditional on the survival of AFG. If someone takes them over or an MBO that would be great for a note holder since IMO that would be a "trigger event" (but you don't know how the legal eagles would interprete it). Note also that the turn over of the notes is quite low (compared to the share) and that small volumes have a big affect of the sp. Most holders are holding on to their notes (there were $350m @ $100 each issued).

 
macrae
post Posted: Feb 27 2008, 10:06 PM
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She is in trouble icon13.gif

Allco explains Review Event on $900m debt
19:05, Wednesday, 27 February 2008

Sydney - Wednesday - Feb 27: (RWE Australian Business News) -
Allco Finance Group (ASX:AFG) late today responded to ASX queries over
recent events.

ASX: 1. When was the Company first aware that a Review Event had
been triggered?

AFG: The Facility Agreement for AFG's $900 million senior debt
facility sets out a number of circumstances which constitute a Review
Event. These circumstances include where AFG's market capitalisation
falls below $2 billion.
If a Review Event occurs, AFG must notify the syndicate banks'
agent. While the Review Event subsists, the Majority Lenders (those who
have lent at least two-thirds of the aggregate borrowings) may notify
AFG, within 20 business days, if the Review Event is unacceptable or, if
acceptable subject to revised finance terms, those revised terms.
If the Majority Lenders notify AFG that the Review Event is
unacceptable, AFG must repay the facility in full within 3 months.
If the Majority Lenders notify AFG that the Review Event is
acceptable subject to specified revised finance terms, AFG must either
implement those revised terms or, if the revised terms are not
acceptable to AFG, AFG must repay the facility within 3 months.
If the Majority Lenders do not give the contemplated notice
within 20 business days they cannot subsequently do so or take any other
action.
The occurrence of a Review Event does not constitute an event of
default under the loan facility.
A market capitalisation Review Event occurred on 18 December
2007 but this did not subsist.
However, following the occurrence of this Review Event, AFG
commenced dialogue with the syndicate banks to restructure the terms and
conditions of this facility.
A market capitalisation Review Event then occurred on 9 January
2008. This has subsisted since that time.
Following the occurrence of this Review Event AFG continued to
engage in negotiations with the syndicate banks to restructure the terms
and conditions of this facility.
At no time prior to the expiry of the 20 business days from 9
January 2008 did the Majority Lenders notify AFG that the Review Event
was unacceptable or acceptable subject to revised finance terms, or
indicate that they would give such notice if the Review Event continued
to subsist.
AFG's operations continued unimpeded during this time. AFG is in
compliance with the financial covenants under the facility.
Just prior to the expiry of the 20 business day period following
9 January 2008, AFG at the syndicate banks' request agreed to an
extension to that period until 31 March 2008.
As noted in AFG's Half Year Report, AFG remains in constructive
discussions with its syndicate banks to restructure the terms and
conditions of this facility and to seek approval of the Group's plans to
reduce debt, and these negotiations continue.
AFG has received no indication that it will not be able to
achieve a successful outcome in these negotiations.
It was also noted in AFG's Half Year Report that, although AFG
is taking all measures possible, there is a risk that if negotiations
with the senior bank financiers which have provided the $900 million
senior debt facility are unsuccessful and/or if refinancing, repayment
and/or extension of the $250 million Syndicate Financing Facility due in
May 2008 does not occur, repayment of all facilities may be required in
advance of their current maturity dates.
Whilst AFG believes that these facilities will be successfully
renegotiated, refinanced or reduced there is a heightened risk of
this not being satisfactorily achieved due to the current serious
dislocation in global credit markets and the other issues outlined in
the Half Year Report affecting the Group’s business.
Subject to any changes that may arise from the above matters,
the $900m senior debt facility remains scheduled to mature in September
2009.

*****

2. Does the Company consider the triggering of the Review Event
to be material to the price or value of the Company’s securities?

The occurrence of the Review Event cannot be considered in
isolation from other information relevant to it. Other relevant
information was set out in response to question 1. Please refer also
to the response to question 5.

*****

3. If the Company does not consider the triggering of the Review
Event to be material, please advise the basis on which the Company does
not consider the triggering of the Review Event to be material.

As noted in response to question 2, the occurrence of the Review
Event cannot be considered in isolation from other information relevant
to it. Other relevant information was set out in response to question 1.
Please refer also to the response to question 5.

*****

4. If the answer to question 2 is "yes", please identify an
announcement from the Company earlier than the release of the Company's
Half-Year Report which disclosed this information.

This question does not arise. Please refer also to the response
to question 5.

*****

5. If there was no earlier announcement, and the Company became
aware of the triggering of the Review Event prior to the release of the
Half-Year Report, why was the information not released to the market at
an earlier time? Please comment specifically on the application of
listing rule 3.1 and the exceptions to the rule in listing rule 3.1A.

Listing Rule 3.1A sets out an exception to the requirement in
Listing Rule 3.1 to make immediate disclosure if certain conditions are
satisfied. To the extent (if any) that the totality of the information
relevant to the Review Event constituted information within Listing Rule
3.1, the conditions in Listing Rule 3.1A were satisfied.
Those conditions are, relevantly:
That the information is confidential.
AFG believes that its negotiations with the syndicate banks
concerning the Review Event remained confidential until the release of
AFG's Half Year Report.
That the information concerns an incomplete proposal or
negotiation; or comprises matters of supposition or is insufficiently
definite to warrant disclosure.
AFG considers that in the circumstances described in the
response to question 1 above, this condition was satisfied.
That a reasonable person would not expect disclosure.
ASX Guidance Note 8 states at paragraph 31:
"A reasonable person would not expect information to be
disclosed if the result would be unreasonably prejudicial to the
entity".
and at paragraph 33:
"ASX will balance the needs of the market and the interests of
the entity, bearing in mind the principle on which the listing rule is
based, when considering if this requirement is satisfied."
AFG considers that the premature disclosure of AFG's
negotiations with its lenders in relation to the Review Event and its
assessment of the prospective outcome of those negotiations would have
been unreasonably prejudicial to the outcome of those negotiations.
Disclosure merely that a Review Event had occurred, without reference to
AFG’s negotiations with its lenders and its assessment of the
prospective outcome of those negotiations, would have been inadequate
and would have led to uninformed negative speculation unreasonably
prejudicial to the interests of AFG and its shareholders.

*****

6. Please confirm that the Company is in compliance with listing
rule 3.1.

AFG confirms that it is in compliance with Listing Rule 3.1.

Chart below:


Attached image(s)
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--------------------
<b>"The higher a monkey climbs, the more you see of his behind." </b>
 
 


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