This article is from the Australian Property Journal archive
AUSTRALIA'S second largest investment bank, Babcock & Brown has pounced on the vulnerable Rubicon property trusts left by Allco Finance Group.
Last week, Allco was forced to sell its stake in the trusts under a margin call exercised by Credit Suisse.
This gave Babcock & Brown an opening, the investment bank buying 20.6 million shares in Rubicon America Trust representing a 5.078% interest and 25.2 million shares in Rubicon Europe Trust Group representing a 5.082% interest.
And separately, the Babcock & Brown Japan Property Trust has bought 21 million units in the Rubicon Japan Property Trust, representing approximately 5.1% of total RJT units on issue at an equivalent of $0.22 per unit or $4.6 million.
“Babcock & Brown has well developed real estate platforms in Japan, Europe and North America and has the expertise on the ground to understand the current market dynamics,” Babcock & Brown’s global head of real estate Eric Lucas said.
Last week, Credit triggered margin calls over AFG’s stake in the Rubicon property trusts staple.
Credit Suisse sold 41 million units in RJT at $0.22; 46.6 million units in REU at $0.15; and 40.3 million units in RAT at $0.13. After those sales, AFG’s remaining unitholdings in the Rubicon trusts are 15,076 units in RJT; 8,334 units in REU; and 5,756,227 units in RAT.
On the following day, Allco Principal Investments announced that a voluntary administrator will soon be appointed after negotiations with the National Australia Bank collapsed.
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.
NAB provided a margin loan facility of approximately $110 million to Allco Principals Investments secured by shares in Allco Finance Group.
NAB exercised its rights under its security and appointed Paul Billingham of Grant Thornton as agent for the mortgagee in possession of the shares, specifically 34,482,275 shares in AFG and 4,091,716 shares in Allco HIT, pledged to NAB by entities associated with certain Allco executives.
Babcock & Brown shares closed 9.94% or $1.54 lower at $13.96. Whilst, AFG share price closed 10.5 cents or 16.67% lower at 52.5 cents.
RAT shares closed half a cent or 3.45% lower at 14 cents, REU shares closed 1.5 cents or 9.68% lower at 17 cents and RJT share price closed 3.45% higher at 30 cents.
Australian Property Journal