trading halt re opes prime, page-5

Based on what today's Herald Sun Business Daily section is saying, 3 parcels of shares were "passed to Opes Prime as part of a mergin lending facility in August last year".

Those shares covered JMB, DES and QXQ.

In August 2007, Beconwood (and related entities) took up the QXQ rights issue entitlement /shortfall.

According to a Form 604 (Substantial Shareholder Interests), 20,237,256 shares were taken up by Beconwood in early August as part of the the Rights Issue that had closed at that time. 1.3M shares related to the take up of rights, whilst 18.9M shares were taken up as part of the shortfall.

At the time, those shares (entitlement + shortfall) approximated $1.275M, similar in amount to the amount stated as being owed under the margin facility, according to the media.

According to NineMSN the margin loan value was $1.35 million. See: http://news.ninemsn.com.au/article.aspx?id=445403

According to that same report, 115M QXQ shares, 3.5M JMB shares and 11M DES shares were provided as security over the margin loan facility.

This amounted to 100% of QXQ's shares at the time.

However, immediately prior to the Rights Issue, Beconwood held 94.8M Q shares which, by virtue of the take-up of entitelements + shortfall, increased to 115M Q shares.

At the time, the extra 20.2M Q shares cost $1.275M (@6.3c).

Could it be that the margin facility of August 2007 was linked in some way to last year's Rights Issue?.

That said, why was the shortfall taken up in the first place.

This occurred because Beconwood Corporate Finance underwrote the issue, and Beconwood Securities acted as Corporate Adviser (Prospectus of 2 July 2007).

The Rights Issue went on to raise $7.2M (before costs), through issuing 114.2M shares.

Of that amount 96.7M shares went to existing shareholders, and the remainder (upwards of 17.5M shares) was taken by the underwriter and "subscribed to be investors introduced by the underwriter".

The underwriter received an entitlement fee based on the underwritten amount.

According to the disclosures made under the Prospectus, other placement and underwriting fees were paid during each of 2006/7 and 2005/6, as well as administration service fees.

Details of the amounts paid were disclosed in the Prospectus, as is a statutory requirement.

That seems why the injunctions have been continued with to date and why a more susbtantive hearing has been set for 21 April.

This may not be a simple margin lending arrangement.