The money is important, especially the 65 cents a share capital return, but the real story from today’s announcement from Allco Equity Partners (AEP) is that the Allco name is mud, hence the proposal to change it.

Of course, founder David Coe and his partner, Michelle Coe and the myriad other shareholders won’t mind the name change, just as long as the money makes its way into their needy little hands.

That won’t go down well with shareholders who lost their money in the collapse of the Allco Group and who subscribed for AEP shares at prices well above the $2.60 today (up 31 cents at one stage).

After all, David Coe not only helped invent the Allco company, he helped destroy it and everything associated with it, along with various friends and mates. But the money will come in handy as Dave tries to recreate his magic elsewhere in the world. London is said to be the latest port of call, but there’s not much money there.

Dave and Michelle own 6.38% of AEP. In the Stock Exchange filings, that looks separate. If that’s the case, it’s a handy $3.828 million each; enough for a first first class fares to London and beyond and some nice digs in Chelsea for a while.

The London property market is very depressed, the rental market even more so. Even if it’s a joint holding (although the number shares is slightly different) it’s a handy bit of spending money.

Dave and Michelle control another shareholder, Monetti Group and associates (not specified) own another 5.38% of Allco Equity Partners. That’s another $3.22 million; more London fun money for the Coes and their “associates.”

All up, more than $10 million for the battler that Dave Coe has become, and Michelle. Dave of course sold his Sydney Eastern Suburbs house, Coolong in Vaucluse, for $47 million (reported) late last year before the property market started falling. He needs every penny he can get.

The receivers of Allco will be happy, although Allco Equity Partners is appealing the decision by the courts to uphold the management agreement a subsidiary has for Allco Equity. The receivers effectively control 37% of AEP and that’s worth more than $24 million to them. That will be enough to pay the receivers’ fees and charges for a while yet.

Allco Equity Partners says besides the cash return it will suspend new investment activity and put the future of the company to a vote in two years time.

Allco Equity’s board had decided that the best way to maximise the returns for equity holders was to continue managing current investments, including stakes in IBA Health Group Ltd, Signature Security Group and Baycorp, until the company can sell them profitably down the track. That was likely to completed by the end of 2013.

As part of its proposal, Allco Equity is offering to return $60 million, or 65 cents per share, of surplus cash, subject to shareholder and tax office approval. Allco Equity would retain another $35 million to meet capital requirements and support existing investments.

And the new name? Oceania Capital Partners (OCP), as big a mouthful as Allco Equity Partners.

That should be worth a few cents on the share price.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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