Allco Principals flags appointment of voluntary administrator

Shares in financial services group Allco remain in a trading halt today in the wake of a National Australia Bank (NAB) move on Thursday to exercise its rights on a margin loan facility of around $110 million.

At the same time, Allco confirmed that the Bank of Scotland had informed the company that it would appoint a receiver to all the assets and undertakings of Allco Principals Investments and to 18,341,825 shares in Allco Finance Group.

Further, the company said the directors expected to appoint a voluntary administrator shortly to Allco Principals Investments.

NAB issued a statement after the close of business on Thursday that said it had provided a margin loan facility of approximately $110 million to Allco Principals Investments secured by shares in Allco Finance Group.

It said shares had now been sold under this facility and NAB had been seeking to complete a standstill agreement with Allco Principals Investments based on a heads of agreement signed by Allco Principals Investments undertaking, amongst other things, to provide additional security.

The bank said that Allco Principals had subsequently advised that it would not provide the additional security or meet other requirements sought by NAB and consequently the standstill agreement could not be resolved to the bank’s satisfaction.

It said that it had “now exercised its rights under its security and appointed Paul Billingham of Grant Thornton as agent for the mortgagee in possession of the shares”.

“In light of the deterioration in the value of the Allco Finance Group securities and the refusal to provide additional security per the heads of agreement that has led to this appointment, NAB is assessing an appropriate provision to be included in the half-yearly results,” the bank’s announcement said.

It said: “NAB will pursue all avenues of recovery against Allco Principals Investments and related parties to mitigate its loss.”