Tag Archives: assetco

Readers top 3,400 for AssetCo, MetPro and green dirty tricks

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Last week visits to the site topped 3459 with massive interest in the fate of AssetCo, the collapsing private fire company which owns London’s and Lincolnshire’s fire engines. Two blogs attracted  over 2500  hits. A big number came from the Fire Brigades union (many thanks), but a significant minority are people picking up  the blog from three small investor sites – as speculators wonder whether to dump their shares or throw more money at it. With shares at just 3.50p at the moment the company is little more than junk stock.

A sudden rush on an older blog exposing how the environment ministry has biased its ” red tape” review of green laws and regulations to favour burdens on business at the expense of the benefits of the  law, has attracted over 940 hits. Thanks to environment campaigner, George Monbiot, for retweeting it and attracting extra trade and a  few subscriptions.

Expect now a pause in blogging as I am off  to the tranquil and peaceful delights of the Isles of Scilly for hopefully an accident free holiday ( after my fall there last time!).

Update: Now AssetCo’s financial saviour quits

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AssetCo's state of finances: Pic Courtesy:www.onenewspage.co.uk

 Scott Brown, the Australian financial whizz kid brought in to shake up the collapsing private fire company, quit AssetCo yesterday, it has just been announced.

His departure is the latest blow to the firm which owns and services London and Lincolnshire’s fire engines and provided a strike breaking auxiliary workforce in the dispute with the London Fire Brigade over shift patterns last year.

It came as shares fell to just 3.93p – a new low – which must mean the company is not long for this world.

Appointed only last October the 43-year-old was meant to help turn the company round and plan an expansion of its activities.

The official statement from AssetCo described his departure as part of ” the orderly transition in its finance area  ”  claiming “Mr Brown’s immediate duties and the finance structure is being managed day-to-day by a senior interim manager, who is reporting directly to Interim Chairman, Tudor Davies. ”

 Frankly this is balls. An orderly transition would mean that the company would already have someone  appointed in  his place – not some interim manager who probably has been appointed at the last moment.

 I talked to him  briefly on his mobile when the company was having to raise extra finance – and it was quite clear from the conversation that he saw the company having a big future – once it had got rid of hotchpotch of manufacturing firms  it acquired in the 1980s and could expand by offering its services to other fire authorities and abroad.

More to the point he is  shrewd enough to quit before it goes bust. A check on the land register shows he has a large house in Barnes, south London which he and his partner Elizabeth Hackett-Brown bought for £1.425m in 2009 with a mortgage from HSBC. He won’t want as a director  to  put that at risk if the company goes bust.

 He also is the key man negotiating with the banks – so I just wonder how well the negotiations for extra cash are going.

I have a feeling that it won’t be long before  London Fire Brigade’s shiny engines will be in the hands of the administrators.

Assetco and MetPro: Stains on London’s political masters

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Coleman and Assetco: stain on London fire Brigade

Metpro-stain on Barnet Council

Politicians at the London Fire Brigade and Barnet Council should be hanging their heads in shame for awarding multi-million pound contracts to two private contractors, MetPro and Assetco – one of which is now bankrupt and the other only valued as junk  stock .

Both scandals have featured on this site before but the situation is going from bad to worse.

An extraordinary statement from Assetco -owner of London and Lincolnshire’s fire engines and a strike breaking auxiliary force for London’s firefighters – basically admits that it does not have the cash any more to meet capital repayments needed to run its contracts with London, Lincolnshire and the Middle East.See http://bit.ly/mP5WFa .

The key paragraph reads:  “The main issue that the business is facing is the capital repayment profile not matching the long-term nature of the Company’s contracts. Whilst the Company is cash generative and can meet its interest costs, it does not generate sufficient funds to meet all the repayment of capital as currently scheduled. The banks are supportive regarding the short-term financing situation and are awaiting our proposals on a financial restructuring but in the meantime we are in breach of our banking arrangements.”

This sorry state has been brought about by its former founder John Shannon who last month was summarily dismissed by the company.

Shannon had landed the company in court facing a winding up order for millions of pounds of unpaid taxes from Revenue and Customs-something they don’t do lightly- and a huge £1m unpaid legal bill from Nabarro’s.

No sooner had these been settled by diluting the share price in a £16m offer to new investors then more grief was to follow. The share price  is now down to a junk figure of 4.65p a share –  when it once sold at 66p. Market capitalisation at £11m is now less than the value of its PFI contracts in London and the Middle East.

Yet Shannon and his former co-founder are trying to recover £1.1m from the collapsing firm while facing a counter-claim from Assetco for £8m for ” breaches of fiduciary duties”. A bloody legal battle  is on the way distracting it from its business.

 All this might not matter if they did not own all the fire engines  in the capital and Lincolnshire. But the London Fire Brigade has reacted to the crisis with breath-taking complacency. Gareth Bacon, performance management chair, believes there is no serious problem.

 Brian Coleman, who was wined and dined by Shannon as well as receiving a gift of a £350 Harvey Nicks Christmas hamper, is silent about the fate of his dining companion.

Yet consider this.Would it be appropriate for a public body to avoid paying taxes and be so reckless with its finances so it can’t repay its capital loans to banks? And for the authority to be in a such a bad way that it has had to hire financial staff to sort out the mess. Heads would roll.

Barnet Council is in a similar mess over the bust private security firm MetPro who owed £250,000 to Revenue and Customs for unpaid tax, VAT and even pay roll tax deducted from its employees.

 The fate of this company would not have come to light if it had not been so reckless by filming bloggers and members of the public without their knowledge or permission as they came to watch the council implement cuts.

But now Barnet have admitted they were UNAWARE of the financial plight of the company which got £1m of business and glowing references from them on its website  (now finally removed) and appears to have avoided any public tendering process to get the business.

There is a link to both these scandals and he is called Brian Coleman. He has been the key advocate of the government’s privatisation agenda and cheerleader for the company -particularly the disgraced John Shannon. He is also the big wheel on Barnet Council- Cabinet post for the environment- and must have had some knowledge of the bankrupt MetPro. And there is even a bit part for the complacent Gareth Bacon in all this – his division at  Dutch consultants MartinWardAnderson has made £75,000  (£12,600 a month) over just a six month period in 2010 – providing temporary finance staff for Barnet.

Can anyone do anything about this? Yes- firefighters employed by the London Fire Brigade could ask for a due diligence investigation by the district auditor Michael Howarth-Maden over the handling of the PFI contract, alleging the authority had employed a company involved in proven tax avoidance

 Similarly residents of Barnet could demand an investigation by its external auditors,Grant Thornton into the hiring of MetPro. Here the crucial question should be -how they got the contract in the first place.

It is really time action was taken – the scandalous behaviour of both firms is a stain on London’s politicians.

Millionaire donors bankruptcy threat to Labour attracts record interest

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Just a short note to thank readers who took this website to record levels this week. Not only did it contribute to a  new  high of 3604 in one day, but the  Labour woes story attracted 3848 hits.

Altogether there were over 6500 hits on the website – the majority about the financial killing by Tony Blair’s millionaire donors  who are still lending the party almost £9m. Particular thanks to Paul Staines whose Guido Fawkes website led to 3100 of the 3848 hits ( and two comments from his nibs on the story )and to those who posted a link on the BBC’s Nick Robinson blog and the Political Betting websites, which attracted nearly another 300 hits. Some 17 also came from the Westminster blog on the  Financial Times which commented on the tale.

The second largest hit was on the story revealing three  directors of AssetCo – the private fire fighting company with contracts in London and the Middle East  were quitting their jobs in the wake of the financial crisis that is hitting the firm. Nearly 1700 people read the piece with a large number of hits referred from the Fire Brigades Union, which is fighting the privatisation of fire services, and 91 from Interactive Investor, the website discussion board for anxious shareholders of the company who have seen their shares drop from nearly 70p to 16p at the last count.

Lowest interest is in the plight of the Lib  Dems –  a piece attracted 96 viewers- a rating comparable to their present polling performance.

AssetCo crisis: Shares in doldrums as investors lose faith

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John Shannon - forced to stand down. Pic courtesy Belfast Telegraph

 Assetco, the badly bruised owner of London and Lincolnshire’s fire engines, is still in trouble despite seeing off winding up petitions from Revenue and Customs and law firm, Nabarros, for millions of pounds.

Shareholders hoping to make a quick buck on a rebound have instead seen their investments fall below 10p a share despite attempts by stockbrokers to recommend the company as a strong buy. Shares have fallen to just 8.20p – the lowest so far.

One commented today:

” I remember posting only a few weeks ago that IMO 8.5p would be a fair price for these shares, but now I’m not so sure. Although I am sure that all the lackies at AssetCo will be posting on hear(Sic) to give all sorts of reasons why this is just another temporary blip and that soon the price will rocket on up! When will this day come? Never in my opinion”

However there are other disturbing signs in the wind – offshore investors like Bermuda Bank have been buying in – and Verdes Management, a company turn round specialist, are demanding a more ruthless management team.

 Recently Rock Nominess Ltd- a company formerly owned by Lord Ashcroft- but now owned by City stockbrokers, Sir Charles Stanley, has increased  its shareholding. The company’s  chair is Sir David Howard, former Mayor of the City of London, obviously hoping for a long term gain.

 Previous updates:

March 25: John Shannon, chief executive of AssetCo, has resigned after being defeated by other directors over the massive dilution of its shares  caused by the  placing to pay off debts and a huge Revenue tax bill. He still has a subsantial shareholding.

This followed two days of high drama with Shannon derailing the company’s meeting by refusing to vote for the extra cash, approaching Arcapita a Bahrain bank to invest, and then being forced by a court injunction brought by other directors  to let the £26m bail out through a share placing go through.

Shareholders are divided about this. Discussion on two investment sites can be shows this  and the man in charge of Assetco’s industrial relations is offering advice to investors, showing how nervous they are . See http://bit.ly/g6Qiqq and http://bit.ly/f2YTY7

March 18: Desperate AssetCo has had to raise another £10m -making £26m in all- from shareholders in a rush to pay creditors demanding their money in case it goes bust. Shareholders worried- London fire brigade should be.  Earlier update:since writing this it is reported that creditors will face delays in payments because of the debt crisis hitting the firm. See http://bit.ly/hxmAUh

The extraordinary crisis surrounding AssetCo, the private company which owns and maintains London and Lincolnshire’s fire engines, has taken a dramatic new turn with the decision of its three main directors to quit their posts.

John Shannon, the company’s founder and chief executive; Tim Wighton, chairman, and Australian Scott Brown, the recently appointed chief financial officer, are all standing down as part of a desperate move to regain public confidence in the company.

 The company has been forced to raise £16m from the stock market to reschedule its debts and fight a winding up order from Revenue and Customs after failing to pay a £4m-£8m demand for tax.

The company’s stockbrokers, Arden Partners, are confident that they will raise the cash – but it seems to have come at the price of  John Shannon losing complete control of the company that he founded. Only weeks ago he and his top directors were thinking they could become multi-millionaires by selling off the firm on the back of the London fire dispute and fire minister Bob Neill’s promotion of private companies to take over  the ownership and maintennace of fire engines across England.

Cadogan PR ,who handle the company’s financial press, confirmed the directors were going. They pointed out that Tim Wightman, the chairman, would have stood down at the annual meeting but was leaving early. John Shannon, who has a huge stake in the company will keep his big shareholding, guarantee the company’s multi-million pound overdraft, and probably stay as a  director. They did not know what Mr Brown intended to do. All are likely to be replaced by outsiders.

Shareholders , hoping to make a fast buck from privatisation contracts, are now seeing a massive dilution in their holdings and are speculating on the Interactive Investor website whether they are going to have to pay out lots of cash to the outgoing directors. They have now seen an amazing 80 per cent drop in the company’s share price and have no chance of it going back to its original high because of the massive dilution of shares.

FBU general secretary Matt Wrack said today:
“This has the feel of a company in meltdown.  But this is not any old company suffering from the economic climate.  Because of the contracts it has obtained from the London and Lincolnshire fire authorities, every person in London and in Lincolnshire depends for their safety on the health of this company.  If AssetCo goes down, the banks own all our fire engines.  Even if the fire authorities manage to buy the fire engines back, there will be no one to maintain them.
“All this unnecessary danger stems from a bit of political dogma which says that there is nothing the public sector can do which the private sector cannot do better.  We had no concerns about the maintenance of the fire engines while the fire authorities did the job themselves.”

He called for fire authorities to take back the maintenance of the engines. London Fire Brigade are unlikely to do this and Brian Coleman, the Tory chair, must be very upset to see John Shannon stand down.  No more wining and dining from him in Westminster or free £350 Harvey Nicks Christmas hampers.