The War Is Over - Let The Battle Begin
Sydney Morning Herald
Wednesday May 7, 2008
Gold Fields' purchase of shares in Conquest is the signal for a fight of a different sort.
THE war for Conquest Mining's shares is over. Let the court battles begin. It appears the Netherlands-based predator, Gold Fields, has swallowed the contested stake in Conquest held by its managing director, John Terpu. His stake was seized by ANZ, one of three banks to take the stock of all those poor sods who took what they thought was a margin loan through Opes Prime.Terpu is one of the poorest of poor sods. He had 15.3 million shares caught out when Opes Prime collapsed, worth about $6.4 million at the share price then of 42c. These holdings were used to secure a $472,000 margin loan through Opes Prime. On Friday, ANZ said it had sold its remaining shares in Conquest, at a steep discount of 35c to current prices of more than 50c. (In keeping with ANZ's shambolic record on Opes Prime-related substantial shareholder notices, it said it sold 14.4 million shares and another 850,000 that had not previously been disclosed.)On Thursday Gold Fields said it had bought the 14.4 million shares and that the transaction occurred on April 29. ANZ said it occurred on April 30. Conquest is now in a court battle with ANZ about the damage that the seizure of what used to be part of a blocking stake has caused. Terpu had been hoping ANZ would hold off on the share sale until the case was resolved. Melewar Steel Ventures - the Malaysian company that is party to Conquest's action against ANZ - cannot be too optimistic about ANZ showing mercy on the 32 million shares Melewar used to hold in Gindalbie.Good news at lastAfter a torrid 11 months at the helm of the Toll Holdings spin-off company Asciano, Mark Rowsthorn, has finally had some good news. Shares in the company rose 34c to $4.80 yesterday after Asciano said it had stitched up a new "take or pay" grain haulage contract with GrainCorp. Protecting the rail operator from slumps in grain production, the deal will help turn round a business that has been losing about $3 million a week. The company will also write back $45 million of the $113 million writedown announced in the first half. The good news has offered a glimmer of hope that the debt-laden Asciano has finally turned the corner.Could the positive blip give Rowsthorn more confidence to seek a capital raising to ease his company's $4 billion odd of debt and fund its expansion plans?Crossing everythingThe remaining investors in Allco Finance Group must have everything crossed as they await news that the debt-stricken fund and asset manager has got its rescue plan away with bankers.With the share price rising and falling like the daily tide, their best hope is that Allco can realise as much cash as possible, repay its lenders and then make some kind of distribution to alleviate some of the pain shareholders have borne in the past six months.But if they needed any more confirmation that they are last in the queue after last week's revelations that the banks have been given full security over AFG's assets, that was provided by St George Bank yesterday.Owed $60 million out of a $850 million loan by a syndicate of Australian banks, St George said that in the worst scenario (which presumably means Allco going into receivership) it would get its money back - which is why the Happy Dragon has made no provision for a possible loss.That's great news for St George's customers, but no comfort for Allco's shareholders.Chance of more cutsAs if investors in real estate investment trusts have not been hit hard enough, they are now bracing for cuts averaging 16 per cent on the forecast value of their annual distributions.While prices in the sector have bounced back by about 18 per cent from lows in March, managers are warning that to maintain a healthy unit price, the cost will be a fall in payouts.And if a trust wishes to continue propping up the payout by revaluing assets, it had better think again - JPMorgan is tipping asset values will be written down by $15 billion this year. "This need to hold on to capital is exacerbated by the global credit crunch and the emergence of the first credit rationing phase for the Aussie banks since 1992," JPMorgan says. And it warns that while cutting distributions helps to cut debt, investors may not be "mentally ready for such an outcome". New Bumi offer likelyPT Bumi of Indonesia might look again at a raised offer for Herald Resources after the rival bidders - Indonesia's PT Antam and Zhongjin of China - received the green light from the Foreign Investment Review Board over their $500 million joint offer for the base metals hopeful. The delay, believed to relate to Zhongjin being a Chinese company, was curious, considering Herald's flagship project is in Indonesia and Bumi received its approval much more quickly. But it seems Canberra has put Chinese investments in Australian companies under greater scrutiny, no matter where the project is located. Last week Bumi received approval from shareholders to raise its $2.25-a-share bid to top the $2.50-a-share offer from Antam and Zhongjin. Bumi has yet to make a move, but perhaps it is waiting to see whether its rivals would receive clearance from the review board before deciding whether to top up its offer. Otherwise, its $2.25-a-share bid - combined with its 19 per cent stake in Herald - could have been good enough for it to gain control. Taking the A trainBabcock & Brown is tipped to grab the British train leasing company Angel Trains for #3.5 billion ($7.3 billion). A transaction of this size would help dispel fears that the bank has been hamstrung by the credit crunch. The Daily Telegraph in London reports that AMP Capital Investors is one of Babcock's equity partners in the deal. A spokeswoman for AMP said it did not comment on speculation.The report says about 10 banks have lined up to provide loans worth #2.3 billion if the deal goes ahead. A decision is expected from Angel's owner, Royal Bank of Scotland, as early as next week. xchange@smh.com.au
© 2008 Sydney Morning Herald