This article is from the Australian Property Journal archive
DAVID Coe and Gordon Fell, the instrumental figures behind the Allco and Rubicon machines, shocked the marketplace yesterday by tendering their resignations as executive directors.
This is the second high profile resignation in the property industry in recent times, after Andrew Scott stepped down as chief executive of Centro Properties Group last month.
For Fell, the resignation comes after he was appointed as an executive director in December last year, after he sold Rubicon Holdings – the manager of Rubicon Japan Trust, Rubicon America Trust and Rubicon Europe Trust, to Allco for $276.6 million, the purchase price was 11.7 times Rubicon’s FY07 normalised earnings.
Coe said he will remain an executive of AFG, and assist the company in the implementation of its restructuring program.
And Fell will remain involved in the real estate business.
“My total focus will be to restore value to the real estate trusts on behalf of our investors,” Fell said.
David Turnbull has also resigned as an executive director but will continue in his executive role in Hong Kong.
News of the resignation sent shares in AFG and RJT, RAT and REU falling.
AFG reported a 26.44% fall, its share price closed 23 cents lower to 64 cents yesterday.
Meanwhile, RAT recorded a 11.76% or 2 cents fall to close at 15 cents, RJT closed 2.7% lower at 18 cents and REU closed 15.63% lower or 2.5 cents at 13.5 cents.
The news add further woes to the stable of trusts after Allco proposed to sell between $1.5 billion to $2.1 billion worth of assets last Friday.
Last week, Rubicon’s chairman Gordon fell said the rapid and unanticipated dislocation of credit markets globally has placed considerable pressure on the funding structure of RAT, REU and RJT.
Fell said historically, the availability and pricing of debt made it the most cost effective capital available and the group had employed a relatively high level of gearing in the three trusts.
Proceeds from the sale will be used to repay short term debt and reduce gearing in the three trusts.
Meanwhile, the resignation of three executive directors from the AFG board means that the board now has a majority of independent non-executive directors.
Whilst the board scrambles to find a new Independent Chairman, Bob Mansfield, the Lead Independent Director and Deputy Chairman, will chair the meetings of the Board.
Allco’s chief executive David Clarke said the announcement continues the implementation of a new corporate governance regime within Allco.
“The program will re-position Allco to focus on its core asset classes of aviation, shipping, rail and real estate, in tandem with the orderly disposal of “non-core” assets to reduce debt.
“Allco is in constructive discussions with its banks to restructure its debt facilities,” he added.
“The details of our re-structuring program will be communicated to the market when they are set in place. We have a range of leading global assets and operations, which provide a strong base for the continued operations of the group.
“We will pursue all avenues to rebuild value in the core businesses,” Clarke concluded.
Australian Property Journal
