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     jax
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Username: jax
Post Number: 1832
Registered: 07-2007Rating: N/A
Votes: 0
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| | Wednesday, May 21, 2008 - 04:44 pm: | 
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Tricom's deal with Danish bank Saxo has hit a snag, with the entire dealing desk from Tricom's lucrative Hong Kong office walking out last week to start up another operation.
Saxo has agreed to buy the embattled broker but the deal is subject to due diligence, which is scheduled to finalise early next month. An adverse change in circumstances could put the mocker on the transaction.
Under the Saxo deal, the Danish investment bank which also provides software to Tricom has agreed to inject $20 million in cash into the group for a stake of 35%. Subject to performance hurdles, Saxo has an option to move to 100%, buying the shares from major shareholders Lance Rosenberg, Babcock and ANZ over the next couple of years.
Rosenberg, who founded Tricom in 1994, told BusinessDay he had flown to Hong Kong on the weekend to deal with the matter and has been looking to hire staff.
"The top guy there did not like the new structure and we are in discussions with six people to replace him,'' said Rosenberg. "What is the impact this had had? I don't like losing any business, but probably 10% of our bottom line.''
Tricom was looking to hire people from Bear Stearns Hong Kong which was closing down and from Merrill Lynch which had been laying off staff in the region. Rosenberg said Saxo was aware of the situation.
Tricom's Hong Kong office is believed to be its most profitable branch and biggest contributor to group profits outside Australia, said sources. The bulk of the earnings derive from equities dealing and trading but the business also underwrites floats and reaches into the thriving Chinese market.
Four major business writers have walked plus back office staff of around eight, said one source au fait with the business.
It has been a hectic few months for Rosenberg whose broking and securities lending business fell into trouble when the stockmarket plunged 7.5% on January 22 and could not settle its trades. One position in particular, in Allco Finance shares, received a margin call from ANZ Bank and when Tricom could not meet it, ANZ and Tricom's other lenders forced the broker to reduce the size of its loan book.
Part of the book was shifted over to Opes Prime, which itself collapsed weeks later. In the meantime, Tricom's major client Babcock & Brown tipped in $35 million to keep the broker afloat. Fearing it would lose another margin lending client, the ANZ also took the unusual step a few weeks ago of injecting cash into Tricom itself.
The structure is now Babcock and ANZ with 25% each from a convertible note. Rosenberg has 25% and Tricom staff 25%. ANZ and Babcock dilute to 15% apiece via the Saxo injection.
Despite the turbulence and the jettisoning of the loan book, Tricom's broking operation has traded on. It completed a placement in small iron ore explorer Tamaya this week following a $10 million placement for Incremental Petroleum on Monday and a $156 million placement for Energy World.
Although the group is still under investigation for the dramatic events of January where it failed to settle the feted $100 million Allco trade, the ASX has released Tricom from some of its trading restrictions. They include restrictions on dealing in warrants, options and interest rate securities which were lifted this week.
The restriction on DVT (Delivery versus Payment involving off-market trades) transactions remains, pending a response from the ASX on Tricom's own response to a report by PWC into the group's operations.
Statements produced by insolvency specialist Korda Mentha for Tricom on the company's daily financial position show that $8.9 million was drawn out of the failing Opes Prime business and delivered to Tricom in exchange for shares on February 11, the same day Opes Prime had told the ASX and ASIC that it was having difficulties.
ANZ benefited although the deal had a negative effect on Opes, which was issuing daily margin calls to Tricom as the market was falling and for Tricom it was just as bad as it was left an unsecured creditor of Opes, until it managed to buy its stock back.
mwest@fairfax.com.au
BusinessDay
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jax
Member
Username: jax
Post Number: 1833
Registered: 07-2007Rating: N/A
Votes: 0
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| | Wednesday, May 21, 2008 - 05:16 pm: |
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jms upto 35 was that stockys tip at 10 a few months back.
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riskpirate
Member
Username: riskpirate
Post Number: 774
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 09:26 am: |
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looks like another down day!
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ecchigaijin
Member
Username: ecchigaijin
Post Number: 897
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 10:20 am: |
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Chris, I have replied to your email.
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ecchigaijin
Member
Username: ecchigaijin
Post Number: 898
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 11:31 am: |
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Chris, in regards to that stock, if their capital raising caused a dilution of shares similar to that of FDL then their current price would be on par with FDL.
But would they need that much additional capital?
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chingas
Member
Username: chingas
Post Number: 838
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 11:37 am: |
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I've replied ecchi
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chingas
Member
Username: chingas
Post Number: 839
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 11:57 am: |
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Jeez, take a look at BXB, tanking again on no news this time
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chingas
Member
Username: chingas
Post Number: 843
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 12:49 pm: |
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btw just deleting some of these posts so we're not flooding the forum
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ecchigaijin
Member
Username: ecchigaijin
Post Number: 903
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 01:01 pm: |
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I think from memory BXB had a value of $11 or $12 placed on it last year? About a 50% gain, if it ever makes it there, makes it look somewhat attractive from this price. MQG getting close to $55 brings it close to buy territory again too.
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chingas
Member
Username: chingas
Post Number: 844
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 02:42 pm: |
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Next support level on the DOW is the 12200 i think so careful buying yet
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chingas
Member
Username: chingas
Post Number: 845
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 02:51 pm: |
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Good to see FDL moving again, a close above 16c would be nice
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ecchigaijin
Member
Username: ecchigaijin
Post Number: 904
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 03:02 pm: |
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FDL seems to be getting some attention thanks to the director buying.
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chingas
Member
Username: chingas
Post Number: 846
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 04:20 pm: |
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all time high today, now those options will have to get a move on if this keeps going. I looked at that, maybe I didn't read enough but he only bought 100,000 options at 5.8c, not a big buy by any means.
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ecchigaijin
Member
Username: ecchigaijin
Post Number: 905
Registered: 07-2007Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 04:24 pm: |
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Looks like it could break out if it breaches 18
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chingas
Member
Username: chingas
Post Number: 847
Registered: 06-2007
Rating: N/A
Votes: 0
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| | Thursday, May 22, 2008 - 04:33 pm: |
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