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

[COLIN]

I thought that St. Laurence might be adversely affected by the latest DPC developments but I notice that SLPF shares (Unlisted) have actually risen above their issue price since the issue closed - 75% filled. (The existing shares were selling below the price of the rights issue before closing date.)
The SLPF notes convert to ordinary shares in December.
DPC are writing down their investment in St. Laurence; St. Laurence will no doubt write down its investment in DPC, thereby reducing further the value of DPC's investment in St. Laurence - where does it all end!

[Snapper]

I thought that St. Laurence might be adversely affected by the latest DPC developments but I notice that SLPF shares (Unlisted) have actually risen above their issue price since the issue closed - 75% filled. (The existing shares were selling below the price of the rights issue before closing date.)
The SLPF shares convert to St. Laurence shares in December. DPC are writing down their investment in St. Laurence; St. Laurence will no doubt write down its investment in DPC, thereby reducing further the value of DPC's investment in St. Laurence - where does it all end! I guess we will have a better idea when the St. Laurence results are released - due soon.

SLPF is not St Laurence but ST Laurence manage it. Primarily commercial property exposure.

[Ears]

DPC & St L have no future together in my opinion. I expect a mutual withdrawal.

Further to my previous posts....

Walker was in the news 29 Jan.

Headline "Walker expects big shakedown in finance industry"

Within the article he said..."We will see a number of finance companies that don't collapse, but say, 'we've had enough"

DPC is obviously in that category.

[COLIN]

SLPF is not St Laurence but ST Laurence manage it. Primarily commercial property exposure.

St. Laurence Ltd is much more than just a manager of St. Laurence Property & Finance Ltd (SLPF) - it is the sole shareholder and a substantial noteholder in SLPF. The last published accounts of SLPF, as at 30/9/07, show Ordinary share capital plus Reserves plus Retained earnings amounting in total to over $94,000,000 - all accruing to St. Laurence, along with their share of the then existing notes plus their share of the new notes. (St Laurence Ltd advised that they would be subscribing in full for their entitlement, both as a shareholder and as a holder of existing notes.) So, all in all, I would say that St. Laurence has a substantial financial stake in SLPF.

How St. Laurence finances its investment in SLPF is a matter for conjecture, given that it does not publish its accounts, but it would be a safe bet that it has substantial borrowings - probably secured largely by charges over its SLPF investments. I'm sure that the worth of St. Laurence Ltd. is quite bound up with its involvement in SLPF.

(Just a correction to my earlier post: the SLPF notes convert to SLPF shares - not St. Laurence Ltd shares -on 1 December 2008.)

[mskv]

I wonder if the latest downgrade is a result of the current year-end audit that will be underway as we speak?

Can't wait for the annual result...

As I have previously said, if they have even half-decent finance company software, they should be able to do a liquidity analysis at the push of a button.

Software isn't the issue. Like all software, garbage in garbage out!!

This is more like they don't know how many of their loans aren't going to settle on due date.

Particularly the large loans they have done in Queenstown and Christchurch.

[Ears]

I agree, software discussion is rubbish.


January 2008

Andrew Walker, chief executive of listed finance company Dorchester Pacific, said this week the $20 billion finance company industry may shrink by half or more within two years.

One scenario could see it virtually disappear, he said.

"The retail market hasn't reached the tipping point, but it's getting close to being all over."

He said the industry had mostly funded itself from retail debentures and if confidence collapsed then it would be all over quite quickly.

Everything depended on re-investment rates as C+M discovered.

Alternative funding sources were not viable, due to a storm generated by the US subprime mortgage crisis that has knocked international credit and equity markets, concurrent with the local industry crisis.

The reinvestment rate, the proportion of investors who roll over their investments, fell at Dorchester to 21 per cent in October, but revived to 40 per cent last month. Pre-crisis it was 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 exist," Mr Walker said.

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

The industry had to change its model but that would not be easy as raising money from banks or through equity was equally difficult in the current climate, influenced by the international credit crunch.

Mr Walker said he wouldn't be surprised to see more finance company collapses.

Others will simply close shop. Mergers were not really an option as finance companies' only real assets were their lending teams. (With nothing to lend).

He said finance firms had to boost cash by selling assets, establish funding lines before trouble knocked, cut costs, and nurture their investors with hard information, all of which Dorchester had done."


Since Walker wrote this, the market has deteriorated, & Dorchester has closed its funding lines,(Green & Auguste). Reinvestment rate would be lower.

No future in the finance industry, at their size. What else have they got, zilch.

However probably still sound. Byrnes knows that! Just needs an orderly collection of loans. Don't need a CEO to do that!

Thats my opinion, whats yours.

[The Good Oil]

"Dorchester division sale expected soon
By DAVID HARGREAVES - The Dominion Post | Wednesday, 09 January 2008

Listed finance company Dorchester Pacific might have its investment services division sold before the end of February as it reorganises itself because of tough finance company sector conditions.


Chief executive Andrew Walker said yesterday due diligence on the investment services business had run through the Christmas period and continues this month.

Up to 10 parties originally expressed interest, but this number had been culled for due diligence.

The official target for sale, thought likely to raise between $2.5 million and $5 million, is the end of Dorchester's March financial year."
__________________________________________________ ______________
_
What year did he say this business would sell?
If they get at least the 2.5 million suggested, then that could come in handy.
No wonder he has fallen on his sword, Barry Graham has to go as well.
Time for a right royal rogering, long live the King!, the King, I suggest will return.

[The Good Oil]

Software isn't the issue. Like all software, garbage in garbage out!!

This is more like they don't know how many of their loans aren't going to settle on due date.

Particularly the large loans they have done in Queenstown and Christchurch.

MSKV, you sound like you know somthing we mere mortals dont?
How big are these loans?
Are they problimatic?
Could it just be normal loans, repaid at maturity, creating No issues?

You are right about DPC's software, but my friends tell me that its not just DPC's software that is the problem, its their staff that got issued DPC share north of $2.00 and are a bit p---ed about it. OUCH!!!!

[Ears]

Walker fallen on his sword. Why do you say that? Mutual agreement I'd say.

What do you expect him to do at DPC? Can hardly grow the finance business can he! Its stuffed! Not his fault!

[dsurf]

Walker fallen on his sword. Why do you say that? Mutual agreement I'd say.

What do you expect him to do at DPC? Can hardly grow the finance business can he! Its stuffed! Not his fault!

Who's fault is it if it is not the CEO's & board. I think AW should get a huge payout of several $m for guiding the company so well and being such a huge value generator during his tenure!