Allco punished for hidden debt
After many delays Allco has finally announced a net profit of $83.94 million for the first half of the current financial year, a fall of 10 per cent. The results also included the news that the group had understated its liabilities by $2 billion in last year's annual report. This puts the value of the company at $408 million, well below the $2 billion that was the trigger point for banks to call in a $900 million debt. This would have to have been refinanced in September anyway, but now banks could give the company only 90 days to repay the loan. Chief executive David Clarke said that he wanted to rebuild the company after repaying debts to a comfortable level, but this was not enough to stop the share price plummeting 64 per cent to $1.11 on the day.
Source: Sydney Morning Herald