Skip to content Skip to main navigation

News

Skilled legal advice with
accessible & personal attention

ACT Treasury has loaned Rhodium $19.8 Million

By welkin31 - 4 October 2008 16

Have readers seen the new 2007/2008 Rhodium Annual Report, just posted on their web site.

I find amazing the revelation on page 71 of 80 (pdf file page numbers) that Rhodium is now in hock to the ACT Treasury for $19.8 Million. The ACT Treasury increased its loan to Rhodium in 2007/2008 by $12.5Million compared to $7.3Million at end June 2007. Under all the adverse circumstances impacting on our economy and Rhodium, how secure is this loan from  the ACT Treasury ?

Are there any readers who have accounting skills who could comment on this plus the tables on pages 67 and 68 of 80 where we see Total financial assets compared with Total financial liabilities for 2007 and 2008 and it is stated that by June 2008 Assets were $73.9Million and Liabilities $91.4Million, making for a deficit of $17.4Million.    An alarming figure I would have thought at any time, but even more so given all the current global financial turmoil.  

On page 66 of 80 we see an alternative method for calculation of the Total financial liabilities for 2007 and 2008 which gives numbers circa $10Million higher, at $99.3 and $103.2Million respectively.

Surely any prudent person reading this latest Annual Report could conclude that there are great risks Rhodium will end up with a deficit of several tens of millions of dollars, a loss which ACT taxpayers must bear.

What’s Your opinion?


Post a comment
Please login to post your comments, or connect with
16 Responses to
ACT Treasury has loaned Rhodium $19.8 Million
welkin31 7:45 am 12 Oct 08

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.

tuggies 10:24 am 11 Oct 08

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…

peterh 10:06 am 07 Oct 08

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.

welkin31 8:03 am 07 Oct 08

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.

Aurelius 1:38 pm 05 Oct 08

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.

astrojax 11:11 am 05 Oct 08

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

tuggies 10:22 am 05 Oct 08

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?

astrojax 8:39 am 05 Oct 08

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?

johnboy 5:55 pm 04 Oct 08

rosebud said :

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

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

welkin31 5:47 pm 04 Oct 08

Great news tuggies if the $19.8 Million is safely secured.
Note that what the Rhodium Chairman says in his Chairman of the Board Report intro to the 2008 Annual Report is 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.”
This will leave Rhodium managing ~2600 vehicles, the ACT fleet is 1200. So they will have less economies of scale and the question that needs answering is what will the Rhodium deficit be then. Has tuggies or any accounts savvy reader any idea how total financial assets will compare to total financial liabilities then ? Could Rhodium last until 2011 as the Govt hopes ? What is to stop other “customers” from pulling their fleets out ?
It is not good enough that we are only getting these annual snapshots. Rhodium should be reporting to its owners, the ACT public, quarterly or monthly.

rosebud 5:21 pm 04 Oct 08

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

nyssa76 4:59 pm 04 Oct 08

tuggies, not soon enough….

tuggies 4:22 pm 04 Oct 08

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.
nyssa76 – the gov has announced its closing them down….

kagey 3:42 pm 04 Oct 08

Appalling. Their debt provisions have jumped almost 50% also (page 55).
The actual impairment by age compared year to year show a clear breakdown in debt management. What can you expect when you contract out your financial management and accounting functions. Glad I’m not a shareholder. Oh wait, I’m an ACT taxpayer. Call in the administrators !

nyssa76 3:26 pm 04 Oct 08

Rhodium lose paperwork on a daily basis and then say ‘we never received it’.

No wonder they are in dire straits…someone should close them down.

Related Articles

CBR Tweets

Sign up to our newsletter

Top
Copyright © 2017 Riot ACT Holdings Pty Ltd. All rights reserved.
www.the-riotact.com | www.b2bmagazine.com.au | www.thisiscanberra.com

Search across the site