On Wednesday, the receivers appointed to Sargon, Chris Hill and Daniel Walley of PwC, were reported to secure Sargon’s holdings in Sequoia, representing a 19 per cent stake of the total ordinary shares.
The shares were estimated to be worth approximately $4.6 million, based on Tuesday’s closing price of 20 cents per share.
In a statement to the ASX, OneVue said it and the receivers will be working with Madison to enable a sale of the business, such that the business can continue to operate on a stable footing without unnecessary distractions.
As part of this process, the Sargon rebranding of Madison has ceased and will continue to operate under the Madison name.
Further, OneVue said the operating business of Madison is not subject to any form of insolvency proceedings and it continues to operate on a business-as-usual basis.
“The Madison Group is an important client of OneVue. We have known most of the Madison advisers for many years and we care about them and their businesses,” said OneVue managing director Connie Mckeage.
“The group has been through quite an unsettling couple of years and our main aim is to enable the advisers to get on with the day-to-day servicing of clients without interruption.”
What is the point of buying a licensee? Is there a way to have a profitable licensee at the moment? The banks clearly don’t think so after the swingeing compensation payouts they made. Can a licensee who is purely paid by the advisers make a profit or have a future if the costs (no profit included) per adviser are $50,000 per year?
Centralise the operational functions and bring in the right capability and you can make a profit as a licensee
Problem is there are very few people in Australia that have the capability to run a successful licensee and when I say successful I mean governance risk culture structures people and revenue
I can only think of three people that could do this And two of them run licensees with less than 150 advisers and based out of sydney and Melbourne and the other talent has gone back to pommy land that was based out of Adelaide
Who will purchase Madison and the Sequoia shares and what price is the key question for OneVue. Sargon owes $31 million , i cant see those assets selling for more than $10 million
Anon – Sargon has a portfolio of assets being held by a holding company that can be harvested and sold.
Whether $31ml can be recovered, that’s another QN.
What is the background to this? Who are the protagonists?
OneVue sold Diversa Trustees to Sargon.
Sargon didn’t have the money to pay OneVue for its acquisition, so in response to this, OneVue is acquiring the entities that the Sargon holding coy had in its portfolio as compensation for the defaulted $31million amount.
Basically, OneVue is doing a reverse strip sale – it’s getting parts of Sargon that have value and stapling it into its own portfolio, with the view that this will be a stabilizing force and then hoping to sell them later as a going concern (for a profit).
Sargon had profitable units and unprofitable units.
Interesting – selling a division for $31 million secured against $4.6 million in assets. There is clearly more to this than these bald numbers, for example is it possible to reverse the sale of Diversa Trustees (?), though at what valuation (?). Who is Kerry Packer here and who is Alan Bond?
Soooooo vertical integration is the solution? This is a future regulatory breach waiting to happen. Split Enz were wrong, history does repeat!
Its not vertical integration, they are trying to gain sufficient assets as compensation for the sale of Diversa
If only they had more DIversa – fication they wouldn’t be in this mess