MARGIN CALL by MICHAEL WEST
The Australian –Friday May 11, 2001
HIDER – and – seek
TIME for an update on GEO2, the investment you have when you’re not having an investment. The great disappearing investment.
We noted that former chairman Charlie hider had put his hand up to join the creditors committee, a committee formed by beleaguered punters who went down with the ship.
Charlie reckons that the loan he teed up, on a 36 percent interest rate, just before GEO2 blew up, entitles him to break bread with disaffected shareholders. The latter do not agree.
GEO2 fell into voluntary administration six months ago. The board appointed the administrators. In turn, the administrators did some appointing of their own.
They appointed, wait for it, two consultants to go to the Middle East. These two emissaries just happened to be Charlie Hider and Charlie Laycock (former chief executive).
Their brief? To flog GEO2’s oily water separators to the Arabs.
Naturally, the boys had to be put up in style, so their budget just happened to be $8000 a day. Nice work if you can get it. Very nice work indeed.
In case you thought that was hide, GEO2 doesn’t even own the patent to this technology.
Further, at the creditors meeting, it was revealed that the costs of administration were now up to $1.1 million – plenty more than GEO2 ever made at the bottom line – with an estimated $400,000 to go until completion of the job. So that’s $1.5 million and the administrator’s costs will be $250,00.
Which brings us to $1.75 million all up. And that’s assuming there is no blowout in costs, an ample assumption in itself. |
