ID :
21579
Sat, 09/27/2008 - 17:57
Auther :
Shortlink :
https://oananews.org//node/21579
The shortlink copeid
Lehman Australia under administration
AAP - Administrators for Lehman Brothers Australia (LBA) say they are starting to run the ruler over $800 million of debts and have begun talks with Nomura Holdings Inc over picking up potential assets and employees.
LBA's board on Friday appointed Steve Parbery and Neil Singleton of PPB as
administrators to manage substantial loans owed by LBA to Lehman's units in Asia, UK
and the US.
LBA owed $500 million to its offshore Lehman counterparts and another $300 million
to internal Lehman companies, Mr Parbery said.
An additional $5 million is owed to local creditors.
The administrators will take control of around $600 million of LBA's assets before
holding a creditors' meeting within six days and reporting back to them by the end
of October.
Around $300 million of the assets lie in real estate, which set to be sold.
The remaining assets comprise LBA's investment portfolio.
A meeting with Nomura is set for Monday September 29 where discussions will focus on
the future of LBA's 130 or so employees in Sydney and Melbourne and the building
lease, chattels and computer equipment that the Japanese investment bank could
acquire.
Nomura is also seeking to transfer some key staff of LBA and is negotiating
employment contracts with LBA's remaining staff, which it may add to its
1,100-strong Asia Pacific head count.
The administrators' appointment comes just three days after Nomura agreed to pay at
least 20 billion yen ($A225 million) for the Lehman Asia Pacific units - including
Australia - from the bankrupt New York investment bank.
Nomura trumped Standard Chartered and Barclays banks to acquire the Asian operations
of Lehman after discussions last weekend.
LBA could probably have been in business for another 130 years if it wasn't for the
imported insolvency, Mr Parbery told AAP.
"The lesson is that any other business with big links back into the global markets -
it just goes to show how vulnerable markets and businesses can be from time to
time," he said.
PPB was appointed special purposes liquidator for failed insurer FAI and the
administrator to Allco Partnership Investments.
PPB will also employ some of LBA's key employees to assist with the administration
that will include a review of LBA's investment portfolio that has a book value of
between $250 million and $300 million.
Clayton Utz's David Cowling will help administer "residual issues" linked to LBA's
collateralised debt obligations (CDOs) managed previously through broker Grange
Securities that LBA purchased in January 2007.
We will be trying to avoid possible litigation from local councils, Mr Parbery said.
LBA backed triple-A rated CDOs that were sold to many Australian councils by Grange
and have since resulted in multi-million dollar losses.
Mr Parbery said he was not aware of any mismanagement of the assets held by LBA.
A provisional liquidator from KPMG Hong Kong has also been appointed to Lehman's
Asia operations, while an administrator is looking over Lehman's UK operations.
LBA's board on Friday appointed Steve Parbery and Neil Singleton of PPB as
administrators to manage substantial loans owed by LBA to Lehman's units in Asia, UK
and the US.
LBA owed $500 million to its offshore Lehman counterparts and another $300 million
to internal Lehman companies, Mr Parbery said.
An additional $5 million is owed to local creditors.
The administrators will take control of around $600 million of LBA's assets before
holding a creditors' meeting within six days and reporting back to them by the end
of October.
Around $300 million of the assets lie in real estate, which set to be sold.
The remaining assets comprise LBA's investment portfolio.
A meeting with Nomura is set for Monday September 29 where discussions will focus on
the future of LBA's 130 or so employees in Sydney and Melbourne and the building
lease, chattels and computer equipment that the Japanese investment bank could
acquire.
Nomura is also seeking to transfer some key staff of LBA and is negotiating
employment contracts with LBA's remaining staff, which it may add to its
1,100-strong Asia Pacific head count.
The administrators' appointment comes just three days after Nomura agreed to pay at
least 20 billion yen ($A225 million) for the Lehman Asia Pacific units - including
Australia - from the bankrupt New York investment bank.
Nomura trumped Standard Chartered and Barclays banks to acquire the Asian operations
of Lehman after discussions last weekend.
LBA could probably have been in business for another 130 years if it wasn't for the
imported insolvency, Mr Parbery told AAP.
"The lesson is that any other business with big links back into the global markets -
it just goes to show how vulnerable markets and businesses can be from time to
time," he said.
PPB was appointed special purposes liquidator for failed insurer FAI and the
administrator to Allco Partnership Investments.
PPB will also employ some of LBA's key employees to assist with the administration
that will include a review of LBA's investment portfolio that has a book value of
between $250 million and $300 million.
Clayton Utz's David Cowling will help administer "residual issues" linked to LBA's
collateralised debt obligations (CDOs) managed previously through broker Grange
Securities that LBA purchased in January 2007.
We will be trying to avoid possible litigation from local councils, Mr Parbery said.
LBA backed triple-A rated CDOs that were sold to many Australian councils by Grange
and have since resulted in multi-million dollar losses.
Mr Parbery said he was not aware of any mismanagement of the assets held by LBA.
A provisional liquidator from KPMG Hong Kong has also been appointed to Lehman's
Asia operations, while an administrator is looking over Lehman's UK operations.
