RAMS founder still buyingEmail Print Normal font Large font...

RAMS founder still buying
Email Print Normal font Large font AdvertisementAdvertisementScott Rochfort
January 4, 2008

JOHN KINGHORN has not let the implosion of his RAMS Home Loans business stop him scouring the market for opportunities.

Undeterred by RAMS's frantic attempts to stay afloat and refinance $5.5 billion of short and medium term debt, Mr Kinghorn has snapped up a 6.5 per cent stake in the Allco-managed investment vehicle Record Realty, whose shares hit an all-time low last month.

Ironically, Mr Kinghorn's $15.4 million splurge on Record Realty on December 27 came after the company issued a notice to the market stressing it did not share RAMS's exposure to the current global credit squeeze.

Record Realty said only a small portion of its $1.68 billion of debt was due to expire before April 2010.

Since the statement, Record shares have recovered, and the RAMS founder's investment is so far up by about 10 per cent.

Record shares were unchanged at 67c yesterday, up 6c from when Mr Kinghorn bought in.

Record Realty owns office buildings in Australia, the US and Germany.

Its cornerstone property is the Australian Securities Exchange headquarters in Bridge Street.

The share purchase also marks a return of sorts by Mr Kinghorn to the Allco stable more than a decade after he left the structured finance group he helped found in 1979.

He left Allco in 1996 to devote his time to building up RAMS.

Mr Kinghorn's only other public link to Allco is through his directorship of the Krispy Kreme Australian doughnut store chain, in which Allco has a shareholding.

Mr Kinghorn reaped $650 million when he sold a 74 per cent stake in RAMS when the company listed in late July.

He kept a 20 per cent stake and still chairs the ailing mortgage company.

Barely three weeks after listing, RAMS gained worldwide notoriety as one of the most prominent victims of the credit crisis.

The lender's shares dived when it revealed it would have problems refinancing $6 billion of short-term debt due to the US subprime credit crisis.

RAMS was then forced to sell its brand and distribution network to Westpac for $140 million, leaving it to handle the run-off of existing mortgages and unable to sign new loans.

The UBS-managed listing of RAMS was noted in The New York Times as "the worst initial public offering of the decade".

RAMS shares were steady at 30c yesterday, down 88 per cent on their $2.50 listing price