While chief Qantas joystick-waggler Alan Joyce loves to call the Sydney set stalking his airline's register the "APA Mark II club", there's one name from the original push missing from the membership list this time around. That would be the man who piloted one of the global financial crisis's most spectacular crashes, former Allco executive chairman David Coe.
Coe was a key player in the original attempt by Airline Partners Australia to bid for Qantas and is frequently sighted hanging about with APA II syndicate member John "Singo" Singleton at the marketing guru's Sydney pub.
He was also in Global Aviation Asset Management, an airplane leasing business involving Singo and many of the same APA players, which was sold last year at a tasty profit. However, CBD has confirmed he is not involved in the new group, put together by investment banker Mark Carnegie, that is attacking Qantas management.
In 2007, APA Mark I offered Qantas shareholders $5.45 a share, plus a 15? dividend, in a bid supported by the Flying Kangaroo's board.
Management, including then-CEO Geoff Dixon, who reportedly is in APA II, stood to receive millions in "accelerated equity".
Sadly, it was not to be, as the bid failed to get over the line.
With Qantas now worth about $1.35, investors who rejected the offer must be kicking themselves.
Their loss is taxpayers' gain. As the APA plan involved loading Qantas up with $10.65 billion in debt, the airline would almost certainly have collapsed when the financial crisis hit. Given restrictions on foreign ownership of Qantas, a government bailout would have been inevitable.
On the spice route
CBD hasn't been able to reach Coe, but the trail of the elusive corporate figure leads deep into the jungles of the hospitality industry.
He is often spotted lunching at Neil Perry's chophouses, and company documents show that he is more than just a customer to the ponytailed celebrity chef.
The former Allco boss was also involved in the Sydney and Melbourne outposts of Perry's Spice Temple empire. And he wasn't out the back slicing potatoes.
Coe was a director of two companies, Spice Temple and Spice Temple of Melbourne, from June last year until February this year.
Attempts to contact Coe through Paul Brown, his partner at Ligara Capital, came to naught.
Risky business
On its website Ligara says it focuses on "risk transfer structures supporting the future value of various types of property, plant and equipment; for operating leases, tenor flexibility, portfolio reconstruction and credit enhancement".
It's a pity investors who did their shirts in the failed Allco group didn't have a "risk transfer structure". Allco Finance Group shares, which had changed hands for as much as $12.86 in late 2006, were declared worthless in May 2009.
Atkinson grilled
Shucks, if only they'd asked! John Atkinson, a former Sydney partner at law firm Baker & McKenzie, faced an unpleasant day on the the wrong side of the witness box at an Independent Commission Against Corruption hearing on Tuesday.
Atkinson was being grilled about the 2010 transaction whereby he and four other directors of White Energy (John Kinghorn, John McGuigan, Travers Duncan and Brian Flannery) were going to sell their privately owned Cascade Coal to White Energy for a $500 million. None of the five White directors involved in the related-party deal thought it might have interested either the ASX or White's shareholders to know the family of controversial Labor MP Eddie Obeid had secretly owned 25 per cent of Cascade and had been paid $28 million to "sanitise" the deal. Atkinson told the inquiry it was up to White's independent board to find out.
When asked how the independent board could find out about the Obeid interest, Atkinson replied. "Through due diligence."
"What were they going to do? Beat it out of you?" asked counsel assisting. As it turned out, curly questions from the ASX led to White's then chairman Flannery pulling the pin on the deal in April 2011.
Sage tackled by tax
It has been a tough couple of weeks for Perth Glory owner and mining entrepeneur Tony Sage.
Last week, Paul Kelly, the chief executive of his football club, quit after a kerfuffle over the Glory's ill-fated pursuit of Harry Kewell.
Now, one of Sage's companies, Cape Lambert Resources, has had to stump up $33 million to keep the taxman from the door.
The money, half of a surprise tax bill received in May, will be handed over to the ATO while the dispute wends its way through the system - something Sage told the market on Tuesday could take up to three years.
Last week, Cape Lambert received a please-explain letter from the ASX after heavy trade saw its stock price dive from 24? to 19?.
The fall could have had nothing to do with the impending handover of a huge wad of cash to the taxman because, as the company said, it was "continuing its discussions with the Taxation Office ... no recovery action has yet been instigated by the ATO".
Frequently Asked Questions about this Article…
What was Airline Partners Australia’s (APA) 2007 takeover offer for Qantas and why did it matter to shareholders?
APA Mark I offered Qantas shareholders $5.45 a share plus a 15% dividend in 2007. The bid had board support and would have rewarded management with millions in "accelerated equity," but it ultimately failed to get over the line — a result the article suggests many investors now regret given how Qantas’s value later changed.
Why does the article say investors who rejected the APA offer might regret it?
The article notes Qantas was later worth about $1.35 (as reported) so shareholders who turned down the $5.45-per-share offer likely missed out. At the same time the piece argues that the APA plan would have loaded Qantas with about $10.65 billion in debt, and that the airline might have collapsed in the financial crisis, forcing a likely government bailout because of foreign-ownership restrictions.
Who is David Coe and is he involved in the new APA II campaign against Qantas?
David Coe, the former Allco executive chairman, was a key player in the original APA attempt and was involved in aviation leasing and hospitality ventures. The article says Coe is not involved in the new APA II group put together by investment banker Mark Carnegie, even though he’s often seen with syndicate member John 'Singo' Singleton.
What happened to Allco and what investor warning does the article highlight?
Allco Finance Group shares traded as high as $12.86 in late 2006 but were declared worthless in May 2009. The article uses Allco’s collapse to underscore investor risk — noting the irony that those affected didn’t have the kind of "risk transfer structure" promoted by companies like Ligara Capital.
What does Ligara Capital do, according to the article, and how is it connected to the story?
Ligara Capital says it focuses on "risk transfer structures supporting the future value of various types of property, plant and equipment; for operating leases, tenor flexibility, portfolio reconstruction and credit enhancement." The article mentions attempts to contact David Coe through his partner at Ligara, Paul Brown, were unsuccessful.
What was the White Energy / Cascade Coal controversy mentioned in the article and why did it draw an ICAC hearing?
The article describes a 2010 plan where five White Energy directors were to sell privately owned Cascade Coal to White Energy for $500 million. At an ICAC hearing, questions arose because the family of MP Eddie Obeid secretly owned 25% of Cascade and had been paid $28 million to "sanitise" the deal. After ASX queries, White’s chairman Brian Flannery pulled the deal in April 2011.
How did Cape Lambert Resources get involved in a tax dispute and what effect did that have on its shares?
Cape Lambert, owned by mining entrepreneur Tony Sage, had to stump up $33 million as half of a surprise tax bill received in May; the company said the dispute with the ATO could take up to three years to resolve. The article also notes the ASX sent a please-explain after heavy trading saw the stock price dive from about 24 to 19 (units as reported).
Who are the key people named in the article involved in Qantas activism and related corporate stories?
The article names several figures: Qantas chief Alan Joyce; investment banker Mark Carnegie (who put together the new APA II group); John 'Singo' Singleton (APA syndicate member); former Qantas CEO Geoff Dixon (connected to the original bid); former Allco boss David Coe; and other corporate figures such as John Atkinson, Brian Flannery and Tony Sage, who appear in related corporate and regulatory stories.
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