Angas Securities to propose restructure ahead of June repayment deadline

Investors in an embattled $220 million debenture fund managed by Angas Securities will be offered equity in the business as part of a last ditch effort to avoid the company falling into administration.

Angas Securities executive chairman Andrew Luckhurst-Smith chats to an investor. Picture Roger Wyman

• Angas working on new plans to maximise returns to investors

Investors in an embattled $220 million debenture fund managed by Angas Securities will be offered equity in the business as part of a last ditch effort to avoid the company falling into administration.

In its latest annual report the company says it will go back to investors in the coming weeks to seek approval for a restructure of close to $96 million owed to them by June, as part of its “run-off” repayment agreement.

Under a scheme of arrangement proposal, investors would receive units in a special purpose vehicle, which would be set up to oversee the sale of the fund’s remaining assets.

They would also receive equity in Angas Securities, which continues to run the Angas Prime and Angas Direct managed investment schemes.

It will be the third time Angas seeks amendments and an extension to its repayment agreement, which was first introduced in 2015.

However unlike each of the previous arrangements, the latest offer would relieve Angas of any requirement to make repayments by a specified time.

Investors will be notified of the details of the proposal by April 9, before a meeting planned for April 30.

Angas said it had received “qualified support” from trustee The Trust Company for its restructure plans, and in its annual report lodged last week said it was confident of gaining approval from investors.

“The directors believe that their continued focus on maximising returns of debenture holders and the previous support they have received for all three run-off proposals, despite significant changes to the amount and timing of returns and the rights of individual debenture holders, demonstrates the support for the directors to continue to realise the company’s assets and return principal to the debenture holders,” it said

The company said failure to secure investor support or Federal Court ratification would likely lead to the company being placed into administration.

Auditor Deloitte cast doubt over the company’s ability to continue as a going concern given its liabilities exceeded its assets by $26.3 million.

The company posted a $6.4 million profit last financial year, but that was due largely to a one-off revaluation of its debenture liability, resulting from the latest changes to its run-off agreement ratified in September 2017.

According to the remuneration report, managing director Matthew Hower and executive chairman Andrew Luckhurst-Smith each received a total salary of $279,505 last financial year, including $51,000 in director fees.

In addition, they received property management fees totalling $68,185, via payments made to their related company Angas Property Fund Limited.

In a recent market update, Mr Luckhurst-Smith said the company had achieved substantial cost savings during the run-off phase, including staff redundancies, a reduction to executive director fees and salary reductions.

A company spokesman confirmed that directors fees were reduced by 15 per cent last month, demonstrating the “commitment of the directors to the best interests of debenture holders”.