21/02/2011 - 15:45

Aspen responds to Entrust allegations

21/02/2011 - 15:45

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The three Aspen Group directors subject to a movement to remove them from the company's board have denied claims that the group had lost its way and had underperformed since jettisoning co-founder Angelo Del Borello in June last year.

The three Aspen Group directors subject to a movement to remove them from the company's board have denied claims that the group had lost its way and had underperformed since jettisoning co-founder Angelo Del Borello in June last year.

Aspen Group chairman Reg Gillard, managing director Gavin Hawkins and director Terry Budge said the group was actually forecasting to deliver a strong increase in financial year 2011 pre-tax earnings.

Messrs Gillard, Hawkins and Budge are subject to a requisition from major shareholder Entrust Funds Management and Mr Del Borello to be removed from the Aspen Board, and replaced by Mr Del Borello, Entrust managing director David Franklyn and Richard Colless.

Entrust and Mr Del Borello launched the action because of concerns that Aspen was trading at a significant discount to its intrinsic value.

Messrs Gillard, Hawkins and Budge issued a statement to shareholders today that acknowledged the discount, but also said Aspen's share price outperformed both the ASX 200 Real Estate Investment Trust and ASX 300 REIT indices over the past seven months, to refute the claims of underperformance.

"The business is very much on the right path to generate security-holder value over the next 12 months and beyond," the statement said.

"Far from Aspen having lost its way, the group now has a clear corporate strategy, a well defined senior executive reporting structure, and a cohesive and disciplined management team.

"The team is demonstrating that it can achieve earnings growth and execute on key transactions.

"Indeed, as previously noted the group has outperformed the ASX200 REIT and ASX 300 REIT indices this financial year, and is now well placed to capitalise on the hard work to date."

Mr Franklyn, however, refuted those statements, and said the action to remove the directors was not about seeking control, rather it was about restoring value.

"Aspen shareholders should be disappointed but not surprised by the response of Messrs Gillard, Hawkins and Budge to the serious concerns raised by the requisitioners about the poor performance of Aspen and the lack of board and management vision that sits behind the lack of performance," Mr Franklyn said.

"There is nothing from these 3 directors on why Aspen trades at the biggest discount to NTA of any company in the ASX300 AREIT index with an Australian only focus - which is the sharp end of our argument.

"Instead, what we've seen today are three directors excusing the lack of strategy and performance by saying things are not as bad as they might be and finding comfort in the lack of performance of others.

"That's not a measure that is acceptable to Entrust and nor it should be to any investor in Aspen."

Aspen shareholders can vote on the future management and control of the group at a general meeting to be held March 24.

 

 

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