Strategic sale terminated on adverse credit markets

Friday 17th October 2008

The sale of Strategic Finance Ltd. has been scrapped because deteriorating credit markets meant conditions of the transaction couldn't be met.

The unprofitable finance company will remain in the hands of Australian parent after a group comprising managers and directors of Strategic and a unit of BOS International failed to close the deal.

The bidding group, Clarence Investments, was to have paid Allco NZ$25 million cash, transfer 8 million Allco shares and inject NZ$15 million into Strategic by way of subordinated debt securities and buy loans for NZ$50.2 million as part of the acquisition. BOS International would increase its debt facilities to the company to NZ$150 million from NZ$100 million.

Shares of Allco have slumped 99% in the past 12 months and last traded at 1.7 Australian cents.

By Jonathan Underhill

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