26 February 2008Frances FincunAustralian Securities...

26 February 2008
Frances Fincun
Australian Securities Exchange
Riverside Centre
Level 5
123 Eagle Street
BRISBANE QLD 4000
Dear Frances,
RE: PRICE QUERY
I refer to your correspondence of 26th February 2008. A.B.C. Learning Centres Limited (“Company”) responses to the specific queries raised in your letter are set out below:
1. Is the Company aware of any information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the Company?
No
2 If the answer to question 1 is yes, can an announcement be made immediately? if not, why not and when is it expected that an announcement will be made?
Not applicable
3 Is there any other explanation that the Company may have for the price change and increase in volume the securities of the Company?
(a) Rumours regarding banking covenants
It has come to the Company’s attention that there are market rumours the Company has a financial covenant requiring it to maintain a minimum market capitalisation of AUD $2 billion and that the Company may be in breach of this covenant.
This rumour is incorrect.
The Company has only 3 financial covenants under its 3 year AUD $1.43 billion Multi-Option Syndicated Facility Agreement dated 10 December 2007 (Multi-Option Facility Agreement).
Response to ASX Price Query
● The Shareholders Funds covenant requires minimum “Shareholder Funds” of AUD $2 billion. “Shareholder Funds” is defined as total assets less total liabilities of the ABC Group on a consolidated basis, plus the aggregate face value of all notes issued under the Company’s subordinated note issue of AUD $600 million, completed in June 2007.
● The other covenants relate to funding costs and gearing ratios.
The Company is in compliance with all three financial covenants.
(b) Directors may be required to sell their securities in the Company
A number of the Company’s directors have entered into margin lending arrangements to fund the purchase of shares in the Company. Due to the recent fall in the Company’s share price, some lenders may exercise their right to sell Company shares pursuant to these margin lending arrangements.
The directors do not intend to voluntarily sell their shares in the Company and will only sell if required to do so by their margin lenders.
4 Please confirm that the Company is incompliance with the listing rules and, in particular, listing rule 3.1.
The Company confirms that it is in compliance with the listing rules and, in particular, listing rule 3.1.
Yours sincerely
Matthew Horton
Company Secretary and General Counsel
Media Enquiries:
Scott Emerson
Mb: 0401 998 181 Response to ASX Price Query
ASX Limited
ABN 98 008 624 691
Level 5
Riverside Centre
123 Eagle Street
Brisbane QLD 4000
PO Box 7055
Riverside Centre
Brisbane QLD 4001
Telephone 61 (07) 3835 4017
Facsimile 61 (07) 3832 4114
Internet http://www.asx.com.au
26 February 2008
Mr Matthew Horton
Company Secretary
A.B.C Learning Centres Ltd
43 Metroplex Avenue
MURARRIE QLD 4172
By email: [email protected]
Dear Mr Horton
A.B.C Learning Centres Ltd (the “Company”)
RE: PRICE QUERY
We have noted a change in the price of the Company’s securities from a close of $3.74 on Monday, 25 February 2008 to low of $1.15 today. We have also noted an increase in the volume of trading in the securities over this period.
In light of the price change and increase in volume, please respond to each of the following questions.
1. Is the Company aware of any information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the Company?
2. If the answer to question 1 is yes, can an announcement be made immediately? If not, why not and when is it expected that an announcement will be made?
Please note, if the answer to question 1 is yes and an announcement cannot be made immediately, you need to contact us to discuss this and you need to consider a trading halt (see below).
3. Is there any other explanation that the Company may have for the price change and increase in volume in the securities of the Company?
4. Please confirm that the Company is in compliance with the listing rules and, in particular, listing rule 3.1.
Your response should be sent to me by e-mail at [email protected] or by facsimile on facsimile number (07) 3832 4114. It should not be sent to the Company Announcements Office.
Unless the information is required immediately under listing rule 3.1, a response is requested as soon as possible and, in any event, not later than 1.00 p.m. Brisbane time today, Tuesday, 26 February 2008.
ABS2008.02.26pq-ff Page 1 of 2
Under listing rule 18.7A, a copy of this query and your response will be released to the market, so your response should be in a suitable form and separately address each of the questions asked. If you have any queries or concerns, please contact me immediately.
Listing rule 3.1
Listing rule 3.1 requires an entity to give ASX immediately any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities. The exceptions to this requirement are set out in listing rule 3.1A.
In responding to this letter you should consult listing rule 3.1 and Guidance Note 8 – Continuous Disclosure: listing rule 3.1.
If the information requested by this letter is information required to be given to ASX under listing rule 3.1 your obligation is to disclose the information immediately.
Your responsibility under listing rule 3.1 is not confined to, or necessarily satisfied by, answering the questions set out in this letter.
Trading halt
If you are unable to respond by the time requested, or if the answer to question 1 is yes and an announcement cannot be made immediately, you should consider a request for a trading halt in the Company’s securities. As set out in listing rule 17.1 and Guidance Note 16 – Trading Halts we may grant a trading halt at your request. We may require the request to be in writing. We are not required to act on your request. You must tell us each of the following.
• The reasons for the trading halt.
• How long you want the trading halt to last.
• The event you expect to happen that will end the trading halt.
• That you are not aware of any reason why the trading halt should not be granted.
• Any other information necessary to inform the market about the trading halt, or that we ask for.
The trading halt cannot extend past the commencement of normal trading on the second day after the day on which it is granted. If a trading halt is requested and granted and you are still unable to reply to this letter before the commencement of trading, suspension from quotation would normally be imposed by us from the commencement of trading if not previously requested by you. The same applies if you have requested a trading halt because you are unable to release information to the market, and are still unable to do so before the commencement of trading.
If you have any queries regarding any of the above, please let me know.
Yours sincerely,
Frances Finucan
Senior Adviser, Issuers (Brisbane)
Direct Line: (07) 3835 4017 ABS2008.02.26pq-ff Page 2 of 2