This article is from the Australian Property Journal archive
ALLCO Finance Group has been given a 30-day extension by lenders and at the same time, the group has forecast a $1.5 billion loss for the 2008 financial year.
Allco yesterday agreed with its financiers where the maturity date of its $250 million bridge facility will be extended from May 01 to May 30.
As a condition of the extension, Allco and each of its subsidiaries who are currently guarantors of the senior debt, will grant security over all of their assets to the senior banks.
Allco said the extension of the bridge facility has been granted to enable the continuation of ongoing negotiations between Allco and its full senior bank group for a restructuring of all of Allco’s senior debt facilities.
As part of the bank negotiations, Allco has delivered a business plan which entails restructuring the business to focus on its core asset classes, and an asset sale program to support the pay down of senior debt to a target of $400 million by September 2009.
Allco is scheduled to repay further debt at the end of May and said it has capacity to further reduce debt through other planned asset sales.
Meanwhile, Allco it expects borrowing costs will be higher than under the current arrangements and the facility operating conditions tighter.
Allco said write-downs and impairments, together with anticipated restructuring costs and the potential sale of assets at less than carrying values, may result in a loss in excess of $1.5 billion for the company for the year ending June 30.
Australian Property Journal
