anz bows to opes pressure

http://business.theage.com.au/anz-bows-to-opes-pressure-20080522-2h16.html

ANZ bows to Opes pressure
Email Print Normal font Large font AdvertisementMichael West
May 22, 2008 - 9:29AM

ANZ Bank has agreed to mediation with Opes Prime's unsecured creditors.

This will come as a huge relief to hapless clients of the collapsed stock lender whose savings were lost when the group fell into administration on March 27 and its major lender ANZ appointed receivers soon afterwards.

The agreement by ANZ means that these Opes clients now have a chance of getting some of their money back. As ANZ is yet to sell Opes' illiquid securities, hopes had been fading of any return. ANZ conceded in late April that it faced a loss on its $650 million loan position.

Before the demise of Opes, there had been about $900 million of share collateral against $650 million in security. However, much of the stock is in small illiquid companies which ANZ has found hard to sell in any quantity.

Ferrier Hodgson's lead administrator to Opes companies, John Lindholm, confirmed to BusinessDay that the ANZ and the major parties to the administration had agreed to mediation.

"There has been an agreement in principal between the parties to move to mediation with a view to resolving the issue,'' said Lindholm. "Everything is moving in the right direction."

It has not yet been decided whether the parties will appoint an independent mediator. In mediations the parties can use an outside mediator or simply conduct their own negotiations.

The timetable is now that Lindholm expects to report to creditors by June 23, giving the parties one month to find an outcome.

''We'll either have some sort of agreement in principal by then, or not,'' Lindholm said.

If a deal had not been struck by then but progress had been made, the parties could go back to the court to get an extension to the convening period.

If not, he said, Opes would probably be put in liquidation. In that scenario, Opes assets would be sold, with banks and other secured creditors getting the lion's share and unsecured creditors would be left with very little.

Mediation was "well worth a shot'' compared with the process being dragged out in the courts, Lindholm said.

Straight after Opes went into administration on March 27 ANZ - which had taken a secured charge over the group just one week earlier - appointed its own receivers from Deloitte over the top of the administration.