Third time lucky for Angas Securities as it keeps control of $220 million debenture fund
INVESTORS in Angas Securities’ embattled $220 million debenture fund have again placed their faith in the Adelaide investment firm, rather than a receiver.
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INVESTORS in Angas Securities’ embattled $220 million debenture fund have again placed their faith in the Adelaide investment firm, rather than a receiver.
Despite missed repayment deadlines and acceptance from many investors that they won’t see all of their money again, Angas received 78.5 per cent support to allow it to continue to manage the fund. It required a 75 per cent vote to continue on and enact proposed amendments.
Had it failed, a receiver would have been appointed to manage the fund’s remaining assets, which Angas argued would result in a fire sale and, ultimately, a lower return.
Once ticked off by the Federal Court, the most notable change is that Angas now has until June 2019, rather than September 2017, to repay the more than $130 million that is still owed.
Other changes include a reduction in the minimum value of liquid assets Angas must hold at the end of each month from $5 million to $2 million, and that $5.58 million of unpaid interest be “forgiven” and there be no further accrual of interest — alleviating the need to pay a further $11.52 million.
It was the third year in a row that Angas has successfully sought amendments to a “run-off” agreement.
The meeting, chaired by former Supreme Court judge Bruce Debelle, came about because Angas could not meet the repayment deadline it asked — successfully — investors to approve last year.
At the time, 34c in the dollar had been repaid and Angas said the shortfall would be returned to investors by no later than September 30 this year.
But just 42.5c in the dollar has now been repaid — $20 million in the past year — leaving Angas more than $130 million short.
At a 2015 meeting, Angas said it would have all money repaid by the end of 2016.
In 2015, Angas received about 90 per cent support for its proposal, which fell to 79 per cent in 2016.
Angas executives Andrew Luckhurst-Smith and Matthew Hower today made their case to around 150 investors at the Adelaide Convention Centre as to why their company was best positioned to retain control.
Mr Luckhurst-Smith was tight-lipped immediately after the meeting, preferring instead to wait until the result was confirmed. When that occurred, he said the result was “an endorsement of our commitment to getting the best possible outcome for investors”.
A few hours earlier he said “time will tell” if the assumptions made by Angas in forecasting a 100 per cent return to investors will hold true.
“There is no doubt in my mind that Angas will make a higher return to investors,” he said.
Chris Green from trustee, The Trust Co, believed Angas had been given enough time and that costs under receivership would be less.
Investor Trevor John, who last year supported Angas retaining control, said his views had taken a “180 degree turn”. He does not expect to see all of his money again and that a return of 80 cents in the dollar would make him “less unhappy”.
Mr John said there were some “fairly aggro people” who addressed Angas’ directors during a lengthy question and answer session.
“Most of the aggro was directed towards Angas ... anger that nothing has really happened,” he said.
“This scenario where promises were made — and I realise in the real estate market it’s hard to promise something — but it’s (the return) been so far below the expectation of what would happen.
“And the answer that keeps coming back is that if we hang on longer we’ll get more money, but how long do you hang on for? I think frustration was the general feeling.
Fellow investor Bruce Cutler said he supported Angas’ management because they have a “vested interest”. However, he too does not expect to have all of his principal balance returned.
“I think I’ll get most of it back — it’s an uncertain market,” he said.
“I’m hoping Angas keep control ... receivers are generally bloodsuckers.”
Mr Luckhurst-Smith said 50 per cent of investors had cast their vote prior to the meeting, which The Advertiser was not allowed entry into.
“They were showing that the run-off was going to be extended by an extraordinary resolution,” he said.
Comment has been sought from the trustee.
luke.griffiths@news.com.au