ACT Treasury has loaned Rhodium $19.8 Million

tuggies,

Good to see ACT Treasury officials are now posting the Government’s line on this blog.

PS. I had a look at the ACT Treasury annual report – isn’t that the place where 38 managers had to be sent on anti-bullying training?

I suppose two questions jump out tuggies if Rhodium is running as sweetly as you seem to be saying.
You know that the Govt announced through the Chairman of the Board Report intro to the 2008 Annual Report that the ACT Govt is going to “-transfer the management of the ACT Government Fleet to another provider during 2008-09 and to wind down the rest of the company over a three year period.”

[1] Why would the Govt take its fleet back from Rhodium if all is well ?
Their action will obviously impair Rhodiums ability to thrive / survive and the Govt will surely not get a cheaper deal with a new provider.
[2] Why would the Govt announce it will “…wind down the rest of the company over a three year period.”, if all is as rosy as you seem to be implying.

welkin31 – The ACT’s fleet financing arrangements changed a little over 2 years ago, at which point Treasury commenced providing finance rather than Macquarie Bank (see Note 14). These are loans to finance the ACT fleet vehciles only.

re:

welkin31 said :

Annual Reports show there to be an expanding deficit so that total financial liabilities exceeded total financial assets by $17.4 Million as of 30 June 2008, see pages 67 and 68 of 80 in the 2008 Annual Report.

you’re only looking at financial instruments in that note. You need to also factor in the assets and plant and equipment figures in the balance sheet (notes 8 and 11). If this was not the case, then Rhodium’s net assets position would be negative…

Aurelius said :

A recommendation if this mob owe you money: Hit them hard, and get your cash out of them.
They’ll go belly-up, and you’ll lose out.
Where I work, we’ve had to put them on a very short leash, so they don’t end up owing us too much.
Which reminds me – there should be some publicly-accessible database of businesses who are skating on thin ice, so other businesses don’t get caught out extending credit to businesses who don’t pay. I know the Credit Reference people exist, but their database is not widely available.

try http://www.delisted.com.au – lets you know the status of the company you are concerned with, with ASX linkage and and other agency info.

tuggies, you first said “The loans are for ACT (Govt) fleet vehicles – there is no risk as they are backed to leases with gov agencies and the residual vehicle values.”
We must remember that Rhodium managed the 1200 vehicle ACT Govt fleet from 1 July 2006, which is stated in the 2005/2006 Annual Report. So I would assume the financial structure for that fleet was in place from that date and all assets vehicles etc would have had charges attached.
This $19.8 Million debt to the ACT Treasury originated later, $7.3 Million by 30 June 2007 and then a blow out by $12.5 Million in year ending 30 June 2008. When Govt was trying hard to sell Rhodium.
So do you see tuggies, the timing does not support what you say. It looks to me as if the $12.5 Million was an injection to assist the sale of Rhodium and I can not see what assets it can be secured against because we know from the 2006/2007 Annual Report that as at 30 June 2007, total financial liabilities exceeded total financial assets by $15.3 Million, see the table in Note 17 to the Annual Report, page 76 of 87 of the pdf file page numbering. Surely this indicates that as at 30 June 2007 all vehicles were more than fully “mortgaged”. This $12.5 Million of Govt (our) money that was injected after 30 June 2007, looks to me to be effectively unsecured.

On the 5 Oct tuggies you say, “The liabilities (loans for leases) are matched to assets (vehicles and receivables).”
We understand that principle tuggies but all three Annual Reports show there to be an expanding deficit so that total financial liabilities exceeded total financial assets by $17.4 Million as of 30 June 2008, see pages 67 and 68 of 80 in the 2008 Annual Report.

I still suspect that us ACT taxpayers will be finding several tens of millions out of our hard earned dough when this adventure is finally wrapped up.

A recommendation if this mob owe you money: Hit them hard, and get your cash out of them.
They’ll go belly-up, and you’ll lose out.
Where I work, we’ve had to put them on a very short leash, so they don’t end up owing us too much.
Which reminds me – there should be some publicly-accessible database of businesses who are skating on thin ice, so other businesses don’t get caught out extending credit to businesses who don’t pay. I know the Credit Reference people exist, but their database is not widely available.

nah, i’m jus’ a rabble rouser
rousin’ rabble as i ride… ; )

welkin31 – the company will have to shrink its cost base as its business reduces (nothing new here). The liabilities (loans for leases) are matched to assets (vehicles and receivables).

astrojax – you’re such a idealist! The Govt has a fleet business which needs to be managed out – the Govt can’t just walk away and give more money to an inefficient public transport provider (have you seen how much of our taxes already goes to ACTION??!) And why should public servants use bikes?! – why don’t you observe why the private sector, school and uni students, doctors, nurses, lawyers and retirees should ride bikes? I love arguements about more funds for transport providers (and light rail) when proportionly very people will ever use them…
PS have you ever ridden across town in a full suit on a 38 degree day?

so why prop up this gov’t fleet management firm (rosebud, take note) when this money could be going into better transport solutions generally, like a bus network that actually takes people from where they are to where they want to be..? and why don’t more public servants use bicycles for inter-work transport?

rosebud said :

Who or what is Rhodium (she says, too slack to google)?

That’s why I cunningly linked to past reportage for you.