A $4 billion credit limit? Don't bank on it. Photo: Tamara Voninski
FULL Disclosure loves IPOs, although we've forgotten what they look like of late.
All that financial misery has made going to the market a bit difficult for companies planning an initial public offering.
Indeed, there were just three listings in the final quarter of the financial year, down from 23 for the same period last year. Such is the lack of activity that the Australian Securities Exchange reported there were just 26,000 announcements from listed companies in the last financial quarter, down from 31,202 for the same period last year.
But if you know where to dig, there's always something worth finding. Just take a look at embattled Perth share promoter David Zohar. Last month we reported on his doomed takeover bid for Terrain Minerals, a small-cap gold explorer with small finds in the Bundarra and Coogee gold deposits in Western Australia.
In March, Zohar launched a hostile takeover bid for the mining minnow — just a week after departing the board. Iron Mountain, a listed company controlled by Zohar, offered two of its shares for every Terrain share, valuing Terrain at $2 million at the time of the offer. Terrain's directors claimed the offer was "dirty pool", with a mystery buyer pushing up Iron Mountain's share price at the end of trading some days to sweeten the deal for investors in the takeover target.
Iron Mountain's offer failed, attracting just 18 million acceptances, or 15.4 per cent of Terrain's stock. But that hasn't stopped Zohar from putting together a little IPO of his own.
Email inboxes beeped yesterday with news that Zohar was launching an IPO with Zhukov Pervan in a company called Black Gold Resources.
"It's the usual twisted interrelationships with Zohar's many other companies," wrote one reader who had received the offer. Those "relationships" usually involve one of two Zohar companies — listed United Orogen, of which he is director and Dr Pervan is chairman, and the private company Swancove Enterprises.
Investors in the Black Gold Resources IPO are being asked to pay $25,000 for 250,000 shares — valuing the shares at 10¢ each. A good deal?
With a little digging, you will find a section in United Orogen's 2008 financial statements called Investments in Related Entities, which details the relationships between Zohar's companies. It states United Orogen owns "100,000 ordinary shares in Black Gold Resources at a fair value of $200". That values the stock at 0.2¢ share, a long way from the 10¢ being asked.
Not all Zohar's past dealings have been squeaky clean. After a probe by the corporate plod in 2005, Swancove and Zohar agreed to stop operating an unlicensed financial services business, consenting to Federal Court orders.
$4bn dream
YOUR correspondent's heart missed a beat after he checked his BankWest credit card details at an ATM yesterday and found the "available funds" listed were a tad over $4 billion.
After a few thoughts about following in the footsteps of Leo Gao, the New Zealand petrol station owner who fled with his missus after Westpac made a similar error, or seeing if Ronnie Biggs' old digs in Rio were vacant, a call was made to find out just where this new-found wealth had come from.
After all, I don't quite recall signing off on the $4 billion extension of my credit limit, and I didn't think Kevin Rudd's cash hand-out was that big.
It seems the error is an "integration problem" due to the merger of BankWest and Commonwealth Bank, and "no, you really don't have access to $4 billion, sir". Pity. The thought of setting up a margin lending account with a 90¢ loan-to-asset valuation ratio and buying Commonwealth Bank on my credit card had appeal.
Figure it out
NUMBERS — you'd think banks would be good at them. After all, it was a simple question: "Exactly how many people has ANZ made redundant under the One ANZ program up until December 31 last year?"
As ANZ flack Cherelle Murphy grumpily pointed out, we even asked it three times. Still, by the close of play, there was no confirmation, and ANZ seems to be sticking by its number of 800. Except the bank's own staff disagree.
"I feel compelled to correct one fact in your article," wrote one former ANZ staff member yesterday after reading Full Disclosure. "I worked on the One ANZ project until I was made redundant in January. I know for a fact that the number of staff made redundant by the project stood at 931 at the end of December."
A spokesman for the Financial Services Union also backed the number — "that's our understanding" — but ANZ seems to having trouble with it. At least we learnt they can count to three.
