The question put to the CEO of ASIC and others remains unanswered. The question is shown below:-
Under whatlegislative,regulatoryorministerialauthority does NAIF intend to transfer the taxpayer funded $610 million concessional loan from Genex Power Ltd to the foreign corporation J - Power, (and associated legal entities).Matters to be dealt with in the proposed takeover are set out below. Of particular note is the requirement that NAIF:-
Conduct due diligence on J-Power to ensure they meet NAIF’s criteria for concessional loans.
Whether or not J - Power meets NAIF's criteria for a concessional loan is not at all clear from the legislation under which it operates and the Ministerial Investment Mandate issued by Minister's King and Gallagher.
According to the NAIF website loans are now limited to $50 million. Isn't there a very strong case that J - Power should re-finance the Genes loan from NAIF?Transferring a $610 million NAIF (Northern Australia Infrastructure Facility) concessional loan from Genex Power Ltd to a foreign entity like J-Power involves several legal, regulatory, and procedural steps. Here's an outline of the process and considerations:
Outline of the Process
1. Preliminary Steps
Initial Agreement:
Genex Power Ltd. needs to negotiate and agree with J-Power on the terms of the loan transfer.
Ensure all parties understand the concessional nature of the NAIF loan and its conditions.
Consultation with NAIF:
Inform NAIF about the proposed transfer.
Discuss the implications of the transfer and obtain preliminary approval.
2. Legal and Regulatory Compliance
Due Diligence:
Conduct due diligence on J-Power to ensure they meet NAIF’s criteria for concessional loans.
Evaluate J-Power's capacity to manage the loan and the associated project.
Legal Documentation:
Draft the legal documents required for the transfer, including amendments to the existing loan agreement.
Ensure compliance with Australian financial regulations and any bilateral treaties or agreements.
Regulatory Approvals:
Obtain necessary approvals from Australian regulatory bodies (e.g., Australian Foreign Investment Review Board).
Ensure compliance with international regulations concerning foreign investments.
3. Financial and Operational Considerations
Financial Assessments:
Reassess the financial viability of the project under J-Power's management.
Review the concessional loan terms to ensure they remain appropriate.
Operational Transition:
Plan for the operational transition from Genex Power Ltd. to J-Power.
Ensure the continuity of the project and adherence to the original objectives of the concessional loan.
4. Execution of Transfer
Formal Approval from NAIF:
Submit the final proposal to NAIF for formal approval.
Address any conditions or modifications stipulated by NAIF.
Transfer Execution:
Execute the legal documents and complete the transfer.
Transfer the loan funds and update all financial records.
Post-Transfer Monitoring:
Establish a monitoring mechanism to ensure J-Power complies with the loan conditions.
Periodically report to NAIF on the progress and financial health of the project.
Detailed Considerations
A. Legal Aspects
Ensure all contractual obligations are transferred correctly.
Address any potential legal disputes or issues arising from the transfer.
B. Financial Aspects
Assess the impact of the transfer on the financial stability of both entities.
Ensure that the concessional terms remain beneficial and that the project's financial projections are realistic.
C. Regulatory and Compliance Aspects
Comply with both Australian and international regulations governing such transfers.
Consider the impact on stakeholders, including shareholders, employees, and local communities.
D. Operational Aspects
Develop a comprehensive plan to manage the transition.
Ensure that J-Power has the necessary expertise and resources to continue the project seamlessly.
Conclusion
Transferring a $610 million NAIF concessional loan from Genex Power Ltd to J-Power requires careful planning, extensive legal and regulatory compliance, and meticulous execution. By following the outlined steps and considering all relevant factors, the transfer can be completed successfully, ensuring the project's continuity and adherence to concessional loan terms.
In my post dated 17 June you will see the words; "
your correspondence has been referred to the Australian Securities and Investments Commission for consideration."
As the nations supervisor of markets, Mr Yanco is well aware that timing is of the essence in this matter. When will Mr Yanco advise Minister Gallagher of the outcome of his considerations and will the outcome of his considerations be provided in time for any changes in circumstances?
(20min delay)