Powered by MOMENTUM MEDIA

AFS Group faces insolvency

Aleks Vickovich
— 1 minute read

200-adviser-strong Australian Financial Services (AFS) Group is facing a financial situation that could potentially see it placed in voluntary administration, an email seen by InvestorDaily has revealed.

 

In a confidential email to shareholders issued on 26 February, the chairman of Australian Financial Services (AFS) Group, Barry Stephen, said that it is "unable to raise the finance to enable it to complete the purchase of the outstanding shares in Strategy Portfolio Limited (SPL)".

Advertisement
Advertisement

The communication announced that as a result, AFS would not be exercising its call options.

"At the current time it is the view of the directors that AFS is able to pay its debts as and when they fall due," the email stated.

"However, this may not be the case if all SPL shareholders exercise their rights under their put options.

"In the event that a material proportion of SPL shareholders put their shares, the directors of AFS will carefully review the financial position of AFS.

"This may result in the directors placing the company in voluntary administration, in which case those who have put their shares may become unsecured creditors of the company," it said, adding that there is "an existing $10 million secured creditor".

The period when SPL shareholders are able to exercise their put options ended on 28 February 2013, and it is as yet unknown to InvestorDaily whether any shareholders chose to take this action.

According to AFS Group's website, SPL is a wrap administration service across superannuation, retirement and investment, which was established by AFS in 2000, with "the remaining 80 per cent of Strategy" purchased on 1 October 2007.

AFS Group has approximately $6 billion in funds under management and has a client base of "180,000 Australian individuals, families and companies".

When contacted by InvestorDaily, AFS declined to comment.

 

 

AFS Group faces insolvency
investordaily image
ID logo

related articles

promoted stories

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.