!

I'm tipping an announcement this week broadcasting good news on the finance reshuffles in the Trusts and an update on sales.

Put yourself in the shoes of the financiers for a minute...You've got a loan book that contains a number of "problem borrowers"...you know you cannot handle all the cases so what do you do?

You prioritise the group, don't you?

Into the "A Pile" go all the problem loans that represent a clear and present danger to the bank in the short term.
These need immediate action and all the efforts must be directed at them to clean them up so that banks backside is protected.

Some will be liquidated and/or put into administration particularly those where the bank forms the view that the present management possess less firepower to get a result in the banks favour than the presrent crew of accounting insolvency firms.

These firms btw are short of staff and have work coming out of their ears...but they'll still take the assignment because once appointed they can control the pace once they get the media involvement out of the way.

But back to the Financier who has problems.

Now into the "B" Pile s/he will put those problem loans that have triggered covenant defaults but the bank knows that realistically their backside is covered albeit st a higher LVR ratio. The bank knows that they've got probably a year to act and still know that they will be covered.

Afterall the bank know that they only need to recover an asset sale equal to the loan value and their costs to get out. Bugger the owners!


Then there's Pile C...and this is the pile into which BEC fall.

These companies have loans that are close to or just in breach of covenants...nothing serious mind you but nevertheless technical breaches and the bank need to appear pro-active to their company auditors.

So, they invent a concept called "working closely with our customers in an endeavour to achieve positive outcomes"

You see, the bank knows that these people have the "smarts" to extricate themslves from the poo if they have time and besides these guys will get a much better result than the over-worked, personality devoid, by-the-book, CYA insolvency accountants dressed in brown suits.

C'mon, you've met these people, you know what I mean.

Case in point: CYA (cover your A%se) when dealing with commercial property...sell it at auction..that way no one can claim that the insolvency person didn't do the right thing because they can claim that "the auction determined what the market was prepared to pay at that time".

Now that is BULLDUST because the reality is that all the auction does is put bucket loads of "blood scent" in the air to attract every vulture and buzzard within easy reach.

The price obtained is deplorably low....and the banks know this.

That's why they are very happy working with our BEC team who have proved to be damn good at achieving asset sales in recent times...I mean the Oman deal was a ripper.

I'm now buying BEC ords because I can see BEC having a big future. This week should bring more good news.