Consolidated finally ready to hit the ASX
After months of wrangling, Consolidated Financial Services (CFS) has launched a prospectus to list in October and raise $1.4 million, nearly 12 months after the initial proposed float.
After months of wrangling, Consolidated Financial Services (CFS) has launched a prospectus to list in October and raise $1.4 million, nearly 12 months after the initial proposed float.
The troubled history of CFS is detailed in the prospectus with reports that a couple of the dealer groups have subsequently pulled out of the company.
While no individual groups are named in the prospectus, CFS has signed operating agreements with 27 parties, 19 of which are financial planning groups, and these have become preference shareholders.
As part of these agreements, CFS takes an interest in the firms while the income, in the form of dividends, will be used for future product development and the remainder invested. CFS is planning to pay its shareholders a 12.5 cent annual dividend.
CFS director David Craig says growth for CFS will come from its financial planning members.
According to the prospectus, the BT wrap used by CFS had $98 million under advice from 744 clients at the end of the last financial year. The company has guaranteed BT a minimum of $150,000 of fees for this financial year and $100,000 a year until the agreement expires in March, 2003.
CFS also plans to set up a finance company to provide lending services to the public. It will be funded with $250,000 from CFS and at least $500,000 from the float. The prospectus notes the key to the success of this venture will depend on risk management and the ability to offer the loans through a network of planners, brokers and solicitors.
The float is offering 360,000 preference shares at $4 each, the same equities as those held by the dealing groups forming CFS. A total of nearly 800,000 preference shares are held by the dealer groups and Craig says the groups will be able to buy shares in the float if they wish. The company also has ordinary shares, the bulk of which are held by Craig, (60,000) and fellow director Ken Russell (18,000).
Unless the float is oversubscribed, it will close on September 24.
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