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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: SEC-ond-chance who wrote (82498)	12/22/2002 3:22:51 PM
From: StockDung	Respond to of 122087

TODAYS NEW TEL SUNDAY COMICS Malone turned ACE into a joker By Geoff Elliott 23dec02 HOW do you emerge with 67 per cent of a listed company without being obliged to launch a full takeover bid? Ask New Tel boss Peter Malone. In one of the more curious deals surrounding the collapse of Perth-based New Tel, Mr Malone mortgaged the company's 67 per cent stake in listed subsidiary Advanced Engine Components. ACE has been an auto-technology play for Mr Malone for more than a decade, developing fuel injection systems. It's now in the hands of a Hong Kong-based financier. It was only last week long-suffering ACE shareholders learnt that control had passed to Lim Asia Arbitrage Fund. The fund is registered in the British Virgin Islands and is run by Hong Kong-based financier George Long. On October 11, he agreed to advance Mr Malone $2 million at a credit card-like 20 per cent interest rate, so Mr Malone could pay a deposit for his planned $50 million purchase of telephony reseller Digiplus. It was Mr Malone's last throw of the dice for Digiplus -- but it wasn't enough. The deal collapsed in early November. According to sources, Mr Malone planned to use Digiplus cash flow to repay Mr Long. But, as New Tel collapsed and administrators from PricewaterhouseCoopers were appointed, defaults on Mr Long's advance were triggered. Lim Asia Arbitrage Fund's emergence last week as the substantial shareholder in ACE couldn't have been worse news for New Tel shareholders and creditors. Under the terms of a 70-page agreement Mr Long sent to the Australian Stock Exchange on Friday, Mr Malone gave up New Tel's rights to $4 million that ACE owed it. Phil Carter of PricewaterhouseCoopers described the transaction as curious. He is expected to challenge it on behalf of creditors, who are owed up to $50 million. New Tel assets may be worth little more than $15 million. The deal doesn't appear to have been hugely successful for Mr Long, either -- ACE has little in the way of assets and huge losses. The transaction reportedly involved long-time New Tel broker Findlay & Co. According to sources, the firm also acted as guarantor for New Tel, meaning Mr Long could look to the Sydney-based broker for the $2 million invested.