Allco hits the wall
After a nine-month fight to pay off mounting debt, embattled Allco Finance Group has finally handed over operations of the main listed holding company and over 60 subsidiaries to voluntary administrators Tony McGrath and Joseph Hayes of McGrathNicol.
The specialist aviation, shipping and private equity company, which commenced operations in 1979, relied on credit to buy assets — a strategy that exposed the company to serious debt repayment problems during the current credit crisis.
In a statement to the Australian Securities Exchange, the action to place the company into the hands of voluntary administrators was “taken following the directors’ careful review of the company’s future”. However, the statement did not mention whether the company had failed, or was likely to fail, to meet its scheduled debt repayment obligations to its syndicate banks.
On October 21, Allco reported that it may default on $667 million of senior debt and could miss repayments of $35.5 million and $119.9 million in November and December respectively, unless its banks agreed on an extension.
Trading in Allco shares, which were $0.14 yesterday, has been suspended.
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