$110m Loan Key To Allco Rescue Deal
The Age
Tuesday February 19, 2008
A BANK loan to senior executives of Allco Finance Group has become part of the negotiations to reach a cash-for-assets deal to save the stricken investment company.
The $110 million loan, made available by National Australia Bank as a margin facility to allow Allco's executives to buy shares in the group, is secured against stock held by Allco Principal Investments, a privately owned offshoot. But the ability of API to finance the loan has been dependent on the value of Allco's shares, which have plunged from a high of $13.23 a year ago to the $3.05 mark at which they were suspended last week as the full extent of the group's debt troubles emerged. NAB has been involved in talks between the group and several suitors, including lead bidder Macquarie Group, to reach a deal in which Allco could sell some of its assets in exchange for cash. Meanwhile, investors continue to wait for news on the Allco rescue plan after the group again postponed the release of its half-year results for a second time in three days. The company gave no reason for the latest delay, although sources indicated the ongoing talks were behind the decision.
© 2008 The Age
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