Allco Finance Group

Allco Financial Group was a fully integrated global financial services business, listed on the Australian Stock Exchange and headquartered in Sydney. Major services provided were structured asset finance, funds management and debt and equity funding. At one stage before liquidation, Allco had over A$4.3 billion in assets, and had financed over A$60 billion of transactions. In its most visible public transaction Allco was a part of Airline Partners Australia, the consortium that unsuccessfully attempted to buy Qantas. The company is now in liquidation, after previously being in administrative receivership, following difficulties in refinancing debt and a share price fall of 99% since the beginning of the subprime mortgage crisis.[1]

Allco Finance Group
IndustryFinancial services
Founded1979
Fateliquidation
Headquarters
Sydney
,
Australia
Key people
David Coe, Company Founder
David Clarke, Chief executive Office

History

Allco Financial Group was founded in 1979 by David Coe, a former partner of Sydney law firm Mallesons Stephen Jaques to originate and arrange structured finance transactions for aircraft, ships and rolling stock. Over the years, Allco grew to provide funding for other services, including infrastructure and commercial finance. Allco operated globally and employed over 500 people.

Allco listed on the Australian Stock Exchange in 2006 after merging with Record Investments, which was set up by Allco as its listed investment vehicle in 2001. At the time of listing, the merged entity was valued at A$3billion.[2] Mr Tim Dodd, previously CFO of the BT Financial Group was appointed as chief financial officer in 2006[3] and former Westpac senior executive David Clarke as the new CEO.[4] Ray Fleming took over the CFO role in June 2008 after Tim Dodd's departure.[5]

In December 2006, Allco, along with several other firms, formed the Airline Partners Australia consortium as a bidding vehicle to Qantas although the deal failed in May 2007.

In December 2007 Allco led the acquisition by Australian investors of a series of power plants in the U.S. Northeast from Consolidated Edison, owner of New York City's electric utility, for US$1.48 billion.[6]

Sub-prime crisis

Fallout from the subprime mortgage crisis caused major problems for the company, prompting investor concerns about rising debt levels and causing Allco to refocus its operating model to within business sectors it knew well. Chairman David Coe and two other directors, Gordon Fell and David Turnbull, resigned from the board in March 2008.[7]

Banks seized 14% of the company's shares after it defaulted on margin loans.[8] The company went into voluntary administration on 4 November 2008, at the request of its directors.[1] Major news agencies ran the details of the first major victim of the credit crisis in tandem with the fall of ABC Learning the following day.

David Coe died of a suspected heart attack in Aspen, Colorado, US, 21 January 2013.[9]

Investment areas

Allco invested in many different offerings, mainly in the property and transport areas:

  • Aviation – Allco owned or managed 54 commercial jet aircraft, with another 40 on order. Most were on lease to carriers such as Qantas
  • Shipping – Allco owned or managed 38 shipping vessels with another 23 on order
  • Rail – Allco owned over 3100 railcars and 29 locomotives
  • Infrastructure – Ownership of various facilities, including power generation (including wind), waste water treatment, pipelines, port facilities and energy distribution facilities
  • Property – Ownership of over 117 major properties in 8 countries

References
  1. "Allco goes into receivership". The Australian. 4 November 2008. Archived from the original on 7 November 2008. Retrieved 5 November 2008.
  2. Murray, Lisa (3 May 2006). "Record-Allco decision to go to shareholders". The Age. Melbourne.
  3. 403 Forbidden
  4. John, Danny (23 March 2007). "Allco calls in former banker for transformation scene". The Age. Melbourne.
  5. "Ray Fleming is Allco's new CFO". Australian Associated Press. 18 June 2008.
  6. "Allco to Acquire Con Edison Plants for .48 Billion (Update1)". Bloomberg. 11 December 2007.
  7. Susan Murdoch (4 March 2008). "Three Allco Finance Directors to Resign". The Australian. Archived from the original on 7 March 2008. Retrieved 8 March 2008.
  8. "Australia's Allco Finance executives lose 14.2 percent stake to banks – report". Retrieved 8 March 2008.
  9. abc radio 702
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