MELBOURNE — The Australian property investor Rubicon Japan Trust warned Tuesday that it would not be able to meet an expected margin call, sending its shares down more than half.
Joining a growing list of Australian companies facing margin calls as nervous banks call in their loans amid a deepening credit crisis, Rubicon said it might be unable to pay its debts if it cannot reach an agreement on the margin call of 30 million Australian dollars, or $28 million, with National Australia Bank, or NAB.
Analysts said the problems at Rubicon Japan, one of three trusts managed by Rubicon Holdings, which is owned by embattled investment fund Allco Finance Group, are another sign of the pressures banks are facing.
Richard Herring, director of Burrell, said Rubicon Japan's problems could have "flow-on effects" to other Rubicon units. "NAB has obviously drawn the line in the sand; all the banks are looking to preserve as much capital as they can," he said.
"In this market, investors are increasingly concerned about debt liabilities with all companies," he said, referring to the share price of Rubicon Japan.
Before trading was halted, the shares slumped 57 percent to 10 Australian cents after touching a record low of 9.9 cents. The stock was trading above 70 cents at the start of this year.
The trust said it requested the trading halt because of the uncertainty of the outcome of talks with National Australia Bank.
Allco is one of several high-profile Australian victims of the global credit squeeze and has been forced to sell off assets as it tries to repay debt. It has lost 95 percent of its value since last May, and three of its executive directors have stepped down.
It was part of a consortium that tried to buy Qantas Airways last year for $9 billion.
Other Australian companies struggling with high debts and margin calls include the childcare operator ABC Learning Centers and Centro Properties Group, both of which have seen their share prices plummet.
In October, Allco bought the 80 percent of Rubicon Holdings that it did not already own for 276 million dollars, a price that UBS analysts described as lofty considering it was 29 times fiscal 2008 earnings.
Rubicon Japan has stakes in 22 Japanese commercial properties with more than 300 tenants, which, according to its Web site, are valued at about ¥115 billion, or about $1.18 billion.
The two other Rubicon trusts, Rubicon Europe Trust Group and Rubicon America Trust, have won reprieves under margin calls due to Credit Suisse and have renegotiated debt repayments.
The three trusts have total assets of 5.6 billion dollars, according to the Rubicon Holdings Web site.
Rubicon Japan said Tuesday that it was also in negotiations with another lender over a financing package that would be enough to cover its short-term debt but that no agreement had been reached.
source: 23mar2008
|
To
send Mindfully.org your comments, questions, and suggestions click
here |