CBD
There are the 184 pages of words, graphs, tables and pictures filling the prospectus put out by insurance broking network Steadfast, but apparently not room for one number: 66.
That's the age of Robert Kelly, the chief executive of the soon-to-be-floated group.
According to the Australian Securities and Investments Commission records, Kelly turned 66 on May 3. That's just a year younger than the group's sprightly chairman, former QBE boss Frank O'Halloran.
Neither man's age is given among the interesting facts presented as part of their biographies in the prospectus, although Kelly's spiel does note that he has "more than 44 years experience in the insurance industry".
The prospectus does find room to disclose that Steadfast is giving Kelly a five-year interest-free loan of $5 million to buy 5 million shares in the company.
At $1 each, Kelly is getting the shares at the bottom end of the $1 to $1.20 range Steadfast hopes each will fetch when it lists on August 12.
The final price will depend on how much the institutions slated to take up the bulk of the shares are willing to pay in an institutional book-build, so company management is this week beginning a roadshow in a bid to convince fund managers to take a punt.
If all goes well and Steadfast gets away at $1.20, Kelly's package will be worth $6 million - a $1 million profit.
The shares are locked up in escrow for the term of the loan, but Kelly will be able to sell 20 per cent of them each year, starting next year.
And if he forgets to sell a bundle for some reason (or, God forbid, the share price dips below $1) each year's allocation rolls over to the following year.
Kelly's employment contract binds him to the company until at least November 2016, by which time he will be 69.
Pot calling the ...
Sydney Institute executive director Gerard Henderson was at his finger-waggling best on Friday, tut-tutting about the failure of former Media Watch presenter Jonathan Holmes to respond to questions.
Adopting the persona of his hound Nancy, who nominally writes the weekly Media Watch Dog blog, Henderson complained that: "Mr Holmes went into 'no correspondence will be entered into' mode when he was asked to explain his own position on media matters."
Hang on, is this the same man who, when CBD last month asked questions about the Sydney Institute's latest set of financial records, replied: "As far as I'm concerned, this correspondence is concluded"?
Surely not.
For the record, here are the questions CBD emailed to DrHenderson (for a doctor he is) on June 13, to which a reply is still eagerly awaited:
1. $859,000 of revenue came from "contributions received" (note 2). From whom was this money received?
2. $82,677 of revenue came from "member subscriptions" (note 2). How many members does the institute have?
3. Key management personnel remuneration for the year was $405,608 (note 12). Who are the key management personnel?
4. How much of the KMP pay in 2012 was to the benefit of you and [wife and deputy director] Anne Henderson?
5. Over the five years 2008 to 2012 (inclusive), KMP pay amounts to $1,911,907. How much of this was to the benefit of you and Anne Henderson?
6. Profit fell from $107,914 in 2011 to $7301 in 2012. What do you say caused this fall?
7. Did Nancy get a pay rise?
Brothel sues
Hard times at strip club operator and brothel landlord Planet Platinum, which is thrusting ahead with legal action against its insurer.
Planet Platinum is plenty peeved at the lack of payout from the company that provided its directors and officers cover, specialist insurer Dual Australia.
At issue is the cost of court proceedings in 2010, in which Planet Platinum successfully fended off efforts by the rozzers to shut down its Melbourne strip club, Showgirls Bar 20.
Victoria Police wanted executive chairman John Trimble, the nephew of dead crime lord "Aussie Bob" Trimbole, and then-directors Dragan Micovski and Gayle Howard, barred from holding liquor licences.
Planet Platinum says Dual has failed to abide by a contract that requires them to negotiate in good faith in situations where some of the costs are covered by insurance and some are not.
It's also after the cost of Trimble appearing before ASIC to answer questions under oath during a private examination.
Got a tip?
bbutler@fairfaxmedia.com.au
Frequently Asked Questions about this Article…
Steadfast is an insurance broking network preparing to list on the Australian Securities Exchange. According to the prospectus, the company is scheduled to list on August 12.
Steadfast's prospectus set an indicative IPO price range of $1.00 to $1.20 per share. The final price will be determined by an institutional book‑build, meaning institutional investors will largely decide the ultimate listing price.
Steadfast is providing CEO Robert Kelly with a five‑year interest‑free loan of $5 million so he can buy 5 million shares at $1 each. The arrangement and loan details are disclosed in the company's prospectus.
Yes. Kelly's shares are locked in escrow for the term of the five‑year loan. He will be allowed to sell 20% of the shares each year starting the year after listing. If he does not sell an allocation — or if the share price falls below $1 — that year's allocation rolls over to the following year.
If the shares list at $1.20, Kelly's 5 million shares would be worth $6 million in total. Having effectively paid $5 million (via the loan) for those shares at $1 each, that would represent a $1 million paper profit, subject to lock‑up and sale rules.
Everyday investors should note the disclosed management incentives (for example, the interest‑free loan to the CEO), the escrow/lock‑up and staged sale schedule for insider shares, and the level of detail in executive biographies (the prospectus notes Kelly has more than 44 years' insurance experience but does not list ages). These items can affect alignment of management and shareholder interests and short‑term share supply after listing.
Institutional investors are expected to take up the bulk of the IPO via the institutional book‑build, which will largely set the final share price. Steadfast's management is conducting a roadshow to persuade fund managers and institutions to participate and support the desired pricing.
Planet Platinum, the operator of Showgirls Bar 20 and a brothel landlord, is suing specialist insurer Dual Australia over directors' and officers' (D&O) cover. Planet Platinum alleges Dual failed to negotiate in good faith over costs from 2010 court proceedings (including costs tied to an ASIC private examination). For investors, such disputes highlight how contested D&O claims and coverage interpretations can create liabilities and affect insurer or insured company outcomes.
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