TRA - Turners Automotive Group [previously TNR - Turners Limited]

[POSSUM THE CAT]

Might be a Fire sale of Strategic Finance as Allco try to get out of trouble

[COLIN]

Might be a Fire sale of Strategic Finance as Allco try to get out of trouble

I suspect that Jock Hobbs and his mates will just buy back the 50% they previously sold to Allco - for a great deal less than they sold it for. A great deal for them.

[Toddy]

Questions are now being asked of DPC.

Dorchester held $33m in cash or equivalent. Is this enough, I doubt it, $33m can be wiped out at the stroke of Helen and Cullens pen.

http://www.nbr.co.nz/home/column_art...siness%20Today

[Stranger_Danger]

I suspect that Jock Hobbs and his mates will just buy back the 50% they previously sold to Allco - for a great deal less than they sold it for. A great deal for them.

Nah, it was a crap deal for them. They got paid in Allco HIT shares.

[Toddy]

Interesting buying on market in DPC today.

Don't you mean interesting 'selling'. The sellers are in control of this stock.

[dsurf]

I thought CEO's were meant to support a company & industry. The bizarre board of DPC has picked the biggestclown I have heard of in a long time. Read the following response following a 16% reduction in the share price the preceding day. It would make me cry if I was a holder!

Mr Walker predicted the industry would shrink by half or more within two years or even virtually disappear.

He said finance companies needed to find alternative sources of funding from debentures.

He said in January that Dorchester's debenture reinvestment rate had fallen to around 40 per cent in December, which he said was "not bad".

Before the crisis, it had been 65-73 per cent across the industry.

"It's very simple mathematics. If it (the reinvestment rate) goes to zero and with average debentures 18 to 24 months, then in that time the industry won't exit.

"If the long-run reinvestment rate is 50 per cent, then the industry is going to halve."

He said banks were not really in a position to fill the void as "they have their own issues".

Many have lost billions in the US subprime mortgage market resulting in a credit crunch. In that environment they are loathe to lend and have lost their appetite for risk.

Raising money through equity markets is not an option, for similar reasons.

Mr Walker said he wouldn't be surprised to see more finance company collapses. Others will simply close shop.


Fire the clown please!

[Stranger_Danger]

Rather than "support a company or industry" I like CEO's that tell that truth.

The "clown" has said what he thinks and he is right. Unless things turn around for the finance companies, they *won't* exist.

If no one gives them money, then they have no money to give to other people. If this scenario lasts long enough, even a "clown" can figure out that there is no business left at the end of it.

[dsurf]

A scenario is just one possible outcome - yes doomsday is a scenario - hardly encourages the share price or potential equity injections via share or rights issues.

Actually I agree they should close the doors, sell the assets, return any surplus funds to shareholders.

Great strategic planning by the head of the company!

[COLIN]

I suspect that Jock Hobbs and his mates will just buy back the 50% they previously sold to Allco - for a great deal less than they sold it for. A great deal for them.

Just by way of correction, I now note that Allco later bought the remaining 50% of Strategic so that they are now sole owners.
If Allco is forced to sell they should be able to arouse some buying interest, even in today's market. Strategic is one of the sounder Finance Coys (one of the few on Chris Lee's A List, for instance) but it is going to be hard for even them to stem the tide of nervous investors not renewing, short of being taken over by a manifestly strong party.
(But all this should be under a separate thread, of course.)

[Steve]

I thought CEO's were meant to support a company & industry. The bizarre board of DPC has picked the biggestclown I have heard of in a long time. Read the following response following a 16% reduction in the share price the preceding day. It would make me cry if I was a holder! ...

He actually made this comment weeks ago, it has nothing to do with the big drop in the shareprice...

I must admit that I'm happy that Dorchester no longer owns Direct as I might have started getting a bit paraniod during the period between selling shares and receiving the cash in the bank.