NAB appoints receivers to Rubicon

National Australia Bank Ltd (NAB) said it had appointed receivers and managers to Allco Finance Group (AFG) offshoot Rubicon Holdings.
NAB appointed Chris Campbell and Vaughan Strawbridge of Deloitte as receivers and managers to Rubicon following a request from Rubicon's directors, NAB said in a statement on Friday.

The bank has an exposure of about $20 million to Rubicon and is taking a provision against a proportion of this debt, NAB said. NAB is a lender to the underlying trusts in the Rubicon Group to the extent of about $170 million, and these borrowings are secured by assets, the bank said.

"The trusts are performing and no material losses are anticipated," NAB said. Two of the trusts, Rubicon America Trust (RAML) and Rubicon Japan Trust (RJT) said they could be caught in the fallout from the failure of Rubicon - their direct parent.

RAML said Rubicon's failure could give rise to a default under two debt facilities totalling $US84 million ($A126.74 million). RAML said it was taking steps to clarify the situation, including seeking waivers from its lenders.

RJT said Rubicon's receivership amounted to a "review event" which would spark a
30-day discussion period with NAB.
Both RAML and RJT said they could also be affected if AFG's administrators decided
to cut staff because the trusts were managed by an AFG team.
If this happened, the trusts said it was "possible" that key AFG executives could be
re-employed by certain Rubicon entities to provide services to RAML and RJT.
NAB said it has made secured loans to other companies within the AFG group and no
material losses are anticipated.
The exposure to Allco Principals Investments provisioned in February 2008 was
written off following the sale of the shares in Allco Finance Group in May 2008, NAB
said.
Shares in NAB closed $2.55 or 10.32 per cent lower at $22.15.