Shares in Allco Finance Group (AFG) rose by more than 20% today after the company announced it had been forced by margin calls it to sell most of its holdings in three Rubicon property trusts.
In a statement today the finance group said that Credit Suisse yesterday sold 41 million units in Rubicon Japan Trust at 22 cents each, 46.6 million units in Rubicon Europe Trust at 15 cents each, and 40.3 million units in Rubicon America Trust at 13 cents.
Allco bought the manager of the three trusts, Rubicon Holdings, in a controversial related-party transaction last year.
The finance company said the sales will leave it with small holdings in the three trusts of between 8000 and 5 million shares.
Allco said that $443,474 was still outstanding on the Credit Suisse margin loan, and Credit Suisse intended to sell the necessary number of units to clear this debt.
Despite the news shares in the finance company continued to rise, trading more than XX% higher.
Yesterday Allco’s share price was boosted by more than 33% after the company announced that one of its founders, John Kinghorn, had increased his stake in the group to nearly 10%.
This fuelled speculation in the market that he may be the saviour for the troubled investment company.
Just before market close, Allco shares were placed in a trading halt pending an announcement to the market.
Allco shares, which had been hit hard earlier this year on worries over the company’s high debt levels, last traded up by 21% at 63 cents.
