Wednesday, December 10, 2008

Australian Fund Updates

Allco Equity Partners (AEP.AX): The Liberman family got a margin call and now ANZ owns the 25% of the company that they used to own and which had hoped they could sell to the now bankrupt Allco Finance Group for net asset value (about three times the current share price). Steve Eckowitz at EBB also got a margin call a while back. These wealthy families don't seem to be any smarter than me :) In the meantime, the company was trying to terminate its management agreement with Allco and rebrand. The courts just ruled against it. They're looking to appeal of course. They have also hired UBS to look at ways of reducing the discount in the share price.

Platinum Capital (PMC.AX): The very bold attempt to raise more capital with a 1:1 rights issue only raised a small fraction of the planned amount. Only 13,436,583 of the possible 127,163,967 shares were taken up but some shareholders asked for additional allotments of 2,878,901 shares. So they raised 12% of what they hoped for. They also raised a bit more with dividend reinvestment and a "share purchase plan".

Everest Brown and Babcock Alternative Investment Trust (EBI.AX): The fund is embroiled in legal proceedings over the planned delisting and the postponed shareholder meeting. I'm still hoping to get my redemption money on 19th December (the period was extended from 12th December). The stock is trading at about 1/3 of NAV. The AFR reported that there are rumors that the fund that is bringing proceedings (Laxey Partners) is being forced to sell units in the market due to margin calls.

Everest Brown and Babcock (EBB.AX): Not a fund, but a fund manager. Babcock and Brown (BNB.AX, which is close to bankruptcy) sold a 20% holding in EBB.AX to the Wingate Group which apparently is backed by the Smorgon family of Melbourne. One wealthy investor who didn't get a margin call or go bankrupt apparently :) This is good news I think because the company's share price of 4-5 cents (Smorgon bought at 4 cents and have already made 25% on their investment notionally!) looked like the market thought they were heading for bankruptcy too. Given the apparent smarts of this investor that would appear to not be the case. But $A2 million is peanuts for them so who knows.

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